ARMENIAN DRAM MIGHT START FLOATING
The Messenger
March 5 2009
Georgia
Armenia is experiencing a deficit of USD as a result of currency
interventions by the Armenian central bank, states economic analyst
Andronik Tevanian. The USD rate is kept stable in Armenia, 305 dram
to 1 USD, but to achieve this the central bank makes daily insertions
of USD onto the currency markets. For instance, on February 27 USD
22 million were sold, but consequently there is a deficit of foreign
currency in the country. It is practically impossible to buy USD in
banks and exchange offices.
Andronik Tevanian thinks that the central bank will be unable to
continue with this policy of active intervention as the country’s
reserves have decreased by up to USD 1 billion, leaving a risky
margin. Therefore the central bank has to be more conscious about
continuing in this direction.
If the dram is allowed to float it will be devalued and create a shock
for the population, however there is no alternative, thinks Tevanian.