TODAY’S RISE IN USD EXCHANGE RATE ON ARMEX LOGICAL END OF ITS MONTHLY FALL

Arka News Agency, Armenia
Aug. 17, 2006

YEREVAN, August 16. /ARKA/. Today’s rise in the USD exchange rate
on the Armenian Stock Exchange (ARMEX) is a logical end of its fall
during the last month, bank dealers told ARKA.

According to them, this is a normal process accounted for by bank
clients’ resumed demand for the USD.

On August 16, 2006, the average weighted USD exchange rate on
ARMEX rose by 7.83 points after a month-long fall and reached AMD
406.91/$1. During the last eight days, the exchange rate was below
AMD 400/$1.

According to experts, the Central Bank of Armenia played its role
in the exchange rate stabilization by purchasing US dollars on ARMEX
and thus maintaining the exchange rate at AMD 3999/$1.

According to the dealers, during 4-5 days the CBA purchased about
$10mln, which prevented further fall in the USD exchange rate. Still
earlier, experts forecast that the USD exchange rate would fall down
to AMD 350/$1 without the CBA’s intervention.

Experts point out that a rise in the USD market exchange rate may be
expected judging from today’s exchange rate on ARMEX.

A 9.79% USD depreciation against the AMD has been recorded in Armenia
this year.

The current exchange rate is near the one recorded 11 years ago. Ion
2005, the USD exchange rate ranged from AMD 402/$1 to AMD 406/$1,
and the average annual exchange rate in 1995 was AMD 405.8/$1.

During 13-year history of the Armenian dram, the highest exchange
rate was recorded in March 2003 – AMD 591.76/$1 (the CBA-set nominal
exchange rate). In fact, 45.76% revaluation of the Armenian national
currency has been recorded since that date. In turn, 31.39% (AMD
185.83) USD devaluation against the AMD has been recorded ($1 –
AMD 398.07).