UNTIL NOW DRAM’S APPRECIATION HAS NOT YET SERIOUSLY AFFECTED COMPETITIVENESS OF ARMENIAN GOODS
Noyan Tapan
Feb 07 2007
YEREVAN, FEBRUARY 7, NOYAN TAPAN. The appreciation of the Armenian dram
has not yet seriously affected competitiveness of Armenian goods. The
International Monetary Fund (IMF) Representative to Armenia Nienke
Oomes expressed this opinion. Making a speech at the Yerevan Office of
the Caucasus Research Resource Center, N. Oomes said that as a result
of the appreciation observed in recent years, the ratio of the real
exchange rate and productivity (per capita income) of the Armenian dram
has approached the average indices in the world (previously it was much
lower). As a result, competitiveness of Armenian goods has declined but
it still remains at the average global level. According to the speaker,
competitiveness of Armenian goods may decline to a dangerous extent,
if the processes of average salary growth and the dram’s appreciation
continue without the respective growth of producrivity. N. Oomes
indicated four reasons for the dram’s appreciation: 1. The growth of
labor productivity and, as a consequnece, the increase of people’s
incomes, 2. The increase in monetary remittances and other transfers
from abroad, 3. Positive phenomena in foreign trade (for example,
an increase in prices of exported copper), 4.
"Dramization" of the economy (as demand for the dram grows, it reduces
the value of the dollar). In the opinion of IMF representative,
the Central Bank of Armenia can suspenf the growth of the dram’s
real exchange rate for a short time but this may lead to a jump in
inflation in a few months.
From: Emil Lazarian | Ararat NewsPress
