PanARMENIAN.Net
Abrupt introduction of floating exchange rate policy is more profitable
09.03.2009 15:16 GMT+04:00
/PanARMENIAN.Net/ `Dram devaluation process is an objective step in
CBA and RA Government policy,’ Vice Minister of Finance Vardan Aramyan
told a news conference on Friday. According to him, the preconditions
for dram devaluation had been registered since September
2008. Recession in trade, transfer flow decrease and CBA internal
reserves resulted in floating exchange rate policy introduction.
Previous experience of many countries practicing floating exchange
rate policy, including Russia, had been examined. As the financial
system of Armenia proved to be the most stable in the region, drastic
implementation of floating exchange rate policy was applied here,
which is more profitable in the long run.
`Dram devaluation resulted in price increase for imported goods. In
current circumstances CBA and the Armenian Government had to chose
between financial stability or price stability in the country,’
Aramyan said.
Referring to the issue of possible introduction of fixed AMD exchange
rate by CBA, (AMD360 ` 380 against $1), Aramyan explained that CBA
never announced a restraining policy for AMD.
`The forecast was made to prevent the holding effect and minimize
negative expectations.’
According to Aramyan, the AMD exchange rate has already been
stabilized. If purchase and sale margin amounted to AMD20 on Mar. 5,
the current margin has decreased to AMD 4-5.