CBA CHAIRMAN: ARMENIAN BANKING SYSTEM ABLE TO RESIST CURRENCY RATE ADJUSTMENTS

ARKA
March 3, 2009

YEREVAN, March 3. /ARKA/. Armenian banking system is quite stable
and able to resist currency rate adjustments, Chairman of the Central
Bank of Armenia (CBA) Artur Javadyan said.

Today the CBA adopted a decision to restrain its interventions in
the foreign currency market and return to the policy of floating
rate. According to CBA experts, exchange rate is expected to range
between 360 Drams and 380Drams for $1 in 2009.

avadyan said that the floating rate policy has always been an
objective in long term. Yet, in the last months provision of financial
stability gained a priority, he said. "We believe we achieved it,"
Javadyan said adding that the current state of Armenian financial
system is not bad at all.

Javadyan said the CBA will bring its interventions in the exchange
down to a minimum. Yet, the Central Bank will intervene in case of
acute fluctuations that may lead to extremely undesirable effects,
Javadyan said.

According to his projection, as from today the currency rate will
settle down between 360 and 380 Drams for $1. This range is the result
of serious work carried out by the CBA together with its partners
and experts of the International Monetary Fund and the World Bank,
Javadyan said.

Javadyan stressed that the decisions of the Central Bank have never
been political and will not be such in the future.

"This decision was made taking into account the existing situation,
as the fever that occurred on the markets was just inadmissible for
the Central Bank. These actions were to be taken quickly, urgently
and correctly," he said.

Tuesday morning, before the CBA’s decision to return to the policy of
the floating rate, average exchange rate was 305-308 Drams per USD
in exchange offices in Yerevan. Currently commercial banks set the
supply/purchase rate and keep it within 330-380Drams per USD. Over the
last days the banks limited sale of foreign exchange to individuals.

In the period from 2003 to 2008, USD devaluated by 47.3% in Armenia.