RUSSIA COULD DEMAND ARMENIA JOINS RUBLE ZONE

The Messenger
Jan 29 2009
Georgia

Former Prime Minister of Armenia Grant Bagratian thinks that in return
for assisting Armenia Russia could demand that it joins the ruble zone.

The former PM suggests that the current problems in Armenia are
not only due to the world economic crisis but the state policy
of strengthening of local currency, the Drum, against other
currencies. This is in the interests of importers who are in close
alliance with the authorities. As a consequence of this policy export
has practically stopped.

Russia has to protect its interests and will demand that Armenia enter
the ruble zone. Russian Minister of Finance Aleksey Kudrin stated on
January 22 that Armenia has asked Russia to issue stabilization credit
to assist the country during the global crisis. However neither the
amount nor conditions of this were specified.

Chairman of Armenia’s central bank Artur Javadian stated on January 23
that in the near future an Armenian delegation will arrive in Moscow
to receive this stabilization credit. However Javadian also did not
specify the amount or terms of the credit. Armenia is negotiating
further crisis-combating credits with the World Bank, Asian Development
Bank and EBRD.