RETURN TO FLOATING EXCHANGE RATE TO HELP ARMENIA WITHSTAND EXTERNAL SHOCKS – WORLD BANK
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Interfax
March 4 2009
Russia
The World Bank supports the Armenian Central Bank’s decision to return
to a floating exchange rate for the national currency, Aristomene
Varoudakis, head of the World Bank’s Yerevan office, said at a press
conference on Wednesday.
This decision will raise Armenia’s competitiveness and enable the
country to soften the impact of external shocks on its economy,
he said.
The World Bank is prepared to provide the Armenian authorities with
assistance in enacting measures to ensure the flexibility of the dram,
he said. The bank recently approved a program to lend $50 million
to small and medium-sized business in Armenia. "This program will
commence at an appropriate time and enable Armenian businessmen to
benefit from the transition to a floating exchange rate. Updating the
exchange rate will raise the internal and external competitiveness
of companies working in exports," he said.
The $50-million loan was part of a $525-million strategic aid program
the World Bank is carrying out in Armenia in 2009-2012.
After the Central Bank announced the switch to a floating exchange
rate yesterday, the U.S. dollar jumped up to 400 dram from 307 dram
in the morning prior to the announcement. The national currency is
fluctuating between 360-370 dram/$1 on Wednesday.