TATUL MANASERIAN: HYPERAPPRECIATION OF DRAM HINDERS DEVELOPMENT OF PRODUCTION IN ARMENIA

Noyan Tapan

Jan 26, 2009

YEREVAN, JANUARY 26, NOYAN TAPAN. With the aim of reducing the
negative balance of Armenia’s foreign trade, it is necessary to develop
domestic production, to which, however, the current hyperappreciation
of the Armenian dram is not conducive, the economist Tatul Manaserian
stated at the January 26 press conference. "In the past 2-3 months
the Armenian dram has been the currency that has appreciated most
of all in the world, whereas the Russian ruble, the euro and the US
dollar are at the stage of depreciation," he underlined, adding that
by his calculations, the dram has appreciated by 27-30% as compared
with the indicated currencies.

In the words of T. Manaserian, the dram’s appreciation is the reason
why the foreign trade balance has been disturbed and domestic
production rates are declining. "Thus the Armenian goods are not
attractive in terms of their prices not only outside but also within
the country. People prefer cheaper imported goods of the same quality,"
he noted.

In order to overcome the current situation, according to him,
the level of appreciation of the dram should be reduced gradually:
"the economic and currency policies should be flexible and in line
with today’s conditions".

"The appreciation of the national currency is a great blow to the
Armenian population’s purchasing capacity, especially at the current
stage of the global economic crisis when the impact of the crisis will
soon be felt in the Armenian economy. I think this is a serious threat
to us so both the currency and economic policies need to be revised,"
T. Manaserian said.

It should be mentioned that by official statistics, exports from
Armenia fell by 7.8% to 1 billion 69 million USD, while imports grew
by 35% to 4 billion 411.7 million USD in 2008 on 2007. In 2008 the
average exchange rate of a US dollar made 305.97 drams (in 2007 this
index made 342.08 drams).