IMF WELCOMES PRUDENT MONETARY-CREDIT POLICY OF CBA

Noyan Tapan
Dec 13 2006

YEREVAN, DECEMBER 13, NOYAN TAPAN. The IMF Executive Board welcomed
the prudent monetary-credit policy of the Central Bank of Armenia (CBA)
that aims to maintain price stability. Nienke Oomes, IMF Yerevan Office
Resident Representative, stated this during the December 13 press
conference. According to her, the IMF Executive Board also approved
the floating exchange rate policy that the CBA has conducted for the
same purpose. N. Oomes said that the CBA’s intervention in the foreign
currency market to smoothen sharp fluctuations without setting a target
level of exchange rate was also assessed positively. The IMF Executive
Board takes the view that resisting nominal appreciation pressures
may lead to high inflation, which may have a negative impact on the
vulnerable groups of the population and the economic growth. According
to the IMF, there is no definite evidence of the Armenian dram’s
being overvalued, while the best way to resist the danger posed to
competition is to conduct a policy of promoting productivity growth,
including improvement of the business environment and encouragement
of competition.