ANC EXPLAINS "WHO COULD BENEFIT BY DRAM DOWNFALL"

PanARMENIAN.Net
04.03.2009 14:40 GMT+04:00

/PanARMENIAN.Net/ Armenian National congress commented upon the
situation in Armenia after national currency downfall.

The dram-to-dollar exchange rate has gone up yesterday to AMD 360/$1
against 305 -310 index and Dram/euro exchange rate reached AMD 440
(against 387).

The upsurge followed CB President Arthur Javadian’s statement on
cessation of control over the foreign currency market and return to
floating rate policy.

"The Armenian authorities decision confirmed the forecast of ANK
and its economic commission, specifically the first president Levon
Ter-Petrosyan, about the fact that the authorities won’t be able to
keep up fixed exchange rate policy and will have to make decisions,
which would ensue in national currency downfall," ANK reported.

"The CBA decision is a result of authorities’ ignoring the intensity
of world crisis, short sighted and criminal policy of serving the
interests of importer oligarchs."

ANK announcements kept warning about the necessity to apply floating
rate policy and stop squandering external supplies. The thick skin
policy of authorities is not a result of inability to acknowledge
the reality but a deliberate act of plundering.

Only within recent 4-5 months more than USD 800 million, which fully
accumulated in the pockets of a few oligarchs and officials, were
brought to the country’s internal market from outer reserves under
the guise of artificial maintenance of exchange rate. If the floating
rate policy had been applied in November, the consequences of world
financial crises including price growth, high inflation index, ,
low taxation level (40%-50%) were likely to be mitigated . All of
this can result in social disasters, SME business bankruptcies,
deterioration of commercial banks financial situation, continued
enrichment of importer oligarchs and high ranked officials. As a
result, the mistrust of the society and businessmen to the authorities’
policy keeps growing, stirring up a panic.

ANK suggests returning to floating rate policy, preclude CBA
administrative interference, stop squandering external assets
and restore the optimal level. Its also necessary to provide
the transparency of essential goods price formation to prevent
creation of super profits. According to ANK, gas and electricity
prices should be lowered, 2009 budget reviewed, and governmental
expenditures reduced. "To overcome the crisis we have to suspend
customs administration reforms, specifically reduce taxation basis
for SME business, cease the obligatory use of cash terminals, set
aside the demands to taxi drivers."

To prevent the outflow of bank deposits we have to raise deposit
return guarantees to AMD 5 million (against the fixed AMD 2 million),
inform the population about the measures implemented and provide
truthful data.

ANK added that the program could only be implemented by legal authority
enjoying the trust of population.

From: Emil Lazarian | Ararat NewsPress