DRAM FLOATING EXCHANGE RATE WILL NOT JOLT ARMENIAN FINANCIAL …

Interfax
March 5 2009
Russia

The return to a floating exchange rate of the national currency will
not jolt the Armenian financial market, which is stable at present,
Armenian Prime Minister Tigran Sargsyan said on television on
Wednesday night.

Commercial banks have $700 million worth of cash, so they can credit
their clients and the economy at large, he said. The capital of
Armenian commercial banks has grown by $120 million in the past few
months, so the banks are prepared for changes on the currency market,
Sargsyan said.

The floating exchange rate will have a positive effect on the
Armenian economy and build up export capacities and competitiveness
of Armenia, he said. Businesses are adjusting their development
plans to the Central Bank’s exchange rate forecast of 360-380 drams
to the dollar. It is important though to avoid sharp fluctuations,
the prime minister said.

On Tuesday, the Armenian Central Bank limited its interference in
the domestic currency market and resumed the floating exchange rate
of the national currency.

The official exchange rate for March 4 was 372.95 drams to the dollar.

Armenia will not change its national currency and will not enter the
ruble zone, the prime minister said.

That is illogical. Naturally, we will not enter the ruble zone because
this is impossible, Sargsyan said.

At the same time, Armenia would like to trade with Russia in rubles
rather than dollars, he said.

This is a way to diversify our foreign assets and currency operations
of our businesses and thus to reduce our susceptibility to external
shocks, Sargsyan said.