INT’L FINANCIAL INSTITUTIONS LOSE CONFIDENCE IN ARMENIA: MP

Trend
March 4 2009
Azerbaijan

The influence of the global financial crisis on Armenia’s economy
has led to a loss of confidence among the international financial
institutions that provided cheap loans to the country, Azerbaijani
Economic Parliamentary Commission member Ali Masimli said.

"The crisis in Armenia occurred due to attempts to artificially retain
the national currency," he said.

The Central Bank of Armenia began sharply constraining the dram,
which resulted in an increased dollar. The situation is natural for
a country without domestic production, Masimli said.

There are two primary sources of revenue in Armenia – processing
companies, which suspended their activities due to the crisis,
and cheap loans from international financial institutions. These
institutions will no longer provide large loans to Armenia during
the crisis.

"The current situation in Armenia will affect the inflation rate and
impact the social welfare of the population," Masimli said.

The Armenian government will face huge challenges that will exhaust
the people’s confidence, he added.

"The only way out of the situation is foreign support. But I don’t
think that international financial institutes will risk rendering
financial support to the country," Masimli said.