ARMENIAN PREMIER: FUSS TO MELT AWAY WITHIN 2-3 DAYS
ARKA
March 5, 2009
YEREVAN, March 5. /ARKA/. Fuss caused by transfer to the "floating"
rate will melt away in the country within 2-3 days, Armenian Premier
Tigran Sargsyan said.
Tuesday, the Board of the Central Bank of Armenia (CBA) decided to
return to the policy of the floating rate due to worsening trade
conditions under the global financial and economic crisis, as well
as due to slowing-down of capital inflow. According to CBA experts,
exchange rate is expected to range between 360 Drams and 380Drams
for $1 in 2009.
Fearing that prices could rise, people rushed to supermarkets
to buy first priority goods, including butter, sugar and flour,
thus artificially raising the demand for these goods. This fuss was
not a surprise for the government and it happened also before, the
Premier said.
Already today the commercial banks were effecting transactions in
normal mode and no problems were recorded in the banking and the
financial systems.
The financial system will soon fully regain its stability and pass
it on to importers and exporters as they are the main ones working
directly with commercial banks and exchanging currency, the Premier
said. Once, they get a clear idea of the rate, they will specify the
prices, Sargsyan said in his interview to Armenian TV channels.
The Premier also said that, naturally, the 20% devaluation of the
national cur rency would make many importers and exporters revise
their price policy.
"Naturally, importers have their reserve. During the last years, they
worked in a quite profitable environment, which means that they have
accumulated quite a potential and the transfer (to the floating rate)
should not be painful for them, but smooth," Sargsyan said.
The situation has already stabilized and importers will have their
pricing regimes formed more clearly within the next days, he said.
The Premier also pointed out that the weakening of the national
currency creates favorable conditions for exporters.