Lragir, Armenia
Dec 5 2007

EXCHANGE RATE OF DOLLAR WORRIES GOVERNMENT

The revaluation of the dram, more exactly the depreciation of the
dollar causes worry, said Prime Minister Serge Sargsyan in a briefing
on December 5. Lragir.am inquired from the head of government whether
it worries the government that the continuing revaluation of the dram
and especially the fluctuations reported a few days ago may jolt the
financial market, which for its part may threaten national security.

`Our economy is small and open, and therefore vulnerable.
Figuratively, the storm in the ocean is more dangerous for small
ships and boats. For big ships, the storm is not so dangerous. The
storm on the international market is highly dangerous for us. Here is
one circumstance. The second circumstance is that a peculiarity adds
to all these problems. Our citizens get immense sums from their
relatives who live in the United States or Russia. They get
remittances in dollars. On the one hand, the state of these people is
becoming worse because prices do not go down, and now, for instance,
the dram value of one hundred dollars is less, and it is the second
additional circumstance determining the revaluation of the dram
because a greater dollar sum comes. It is clear that the government
worries about it, it is clear that we are making serious moves,
especially that the depreciation of the dollar does not foster
export. We need to boost our GDP,’ Serge Sargsyan says.

However, he says the moves they take cannot produce results in one,
two or three months. `These moves will have a long-terms effect. What
worries most is the fluctuation by 20 drams. We are attending to this
problem, and this does not depend on the process underway on the
international market, we need to find out the main reason. Was it an
attempt to jolt our economy? Was it a speculation to make money or
was it another process? For instance, interference of other
countries, and so on,’ Serge Sargsyan says.