Deputy finance minister: no precipitous changes in exchange rates
expected in Armenia

YEREVAN, March 10. /ARKA/. No precipitous changes in exchange rates are
expected in Armenia in the nearest future, Armenian Deputy Finance
Minister Vardan Aramyan said.

`Today exchange rate of the dram corresponds to the economic fundament.
I don’t think that the dollar can surge again’, he said.

This Tuesday the CBA Board took into account the gradually worsening
trade conditions amid the present global economic and financial crisis,
as well as lower capital flow rates, and decided to restrict its
interventions in the currency market thereby reverting to its floating
exchange rate policy. CBA experts believed the dollar average exchange
rate would be 360-380 AMD/$1 this year.

As a result, the dollar leapt to AMD 380/400 per dollar driving food
and fuel prices up and triggering panic. Ordinary people rushed into
supermarkets for butter, sugar and flour.

State Commission on Protection of Economic Competition says prices for
vegetable oil, butter, petrol and sugar immediately soared.

Aramyan said that the return to floating exchange rate policy was
prompted by objective factors, such as declining trade, dwindling
inflow of money transfers and reducing reserves of the Central Banks of
Armenia.

He said that Armenian specialists have studied the experience of many
countries, such as Russia, where the authorities implemented a gradual
transition to floating exchange rate policy.

They have also discussed the matter with IMF and WB experts.

Aramyan said that Armenian authorities have chosen precipitous turn to
floating policy, since it needs little expenses, minimizes public
pessimism and leaves less room for speculative manipulations.

In his opinion, the exchange rate is already steady. He pointed out
margin in deals with currency as evidence of that.

`If demand/supply margin was AMD 20 on March 4 and 5, while now it is
five to six drams’, he said.

Earlier, Prime Minister Tigran Sargsyan said that the authorities are
correcting the exchange rate in favor of the national currency.

`Now, correction runs toward revaluation of Armenia dram and the range
calculated by the Central Bank, IMF, WB and independent experts, who
agreed that the exchange rate ranges from AMD 360 to 380 per dollar’,
Sargsyan said then.

On March 3, the Central bank of Armenia announced the return to
floating rate policy.

As a result, the dram plunged 66.36 percentage points against the
dollar, compared with March 2, to AMD 372.11 per dollar.

The dram’s downward motion continued also on March 4 ` it slipped 0.84
points against the dollar.

In recent two days, the national currency started strengthening.

It climbed 12.74 points against the dollar on March 9, compared with
March 3, and reached AMD 359.3
7 per dollar. M.V.-0–