PanARMENIAN.Net

RA CB to continue intervention in foreign exchange markets
12.03.2009 15:39 GMT+04:00

/PanARMENIAN.Net/ `CBA will periodically intervene in foreign exchange
rate market, buying up little quantities of US dollars to prevent
speculative shocks,’ the Chairman of Parliamentary Commission for
Finance, Crediting, Budget and Economy, Member of RA Republican Party
Gagik Minasyan told a news conference on Mar. 12, commenting on dram
devaluation and CBA introduction of floating exchange rate
policy. According to him, the situation in the foreign exchange rate
market has stabilized.

`The return to floating exchange rate policy has long been expected,’
he noted, citing two reasons for that drastic step. `Armenia’s banking
system was ready to service their clients and pay interests for all
the investments previously made. Besides, inflation rate comprised
5.2% in 2008, and in 2009 it decreased by 0.7%.’ He added that in 2008
inflation pressure in Armenia was much lower than in other CIS
countries, where the minimal inflation rate comprised 10%.

Minasyan stressed that a phased introduction policy would have had a
number of disadvantages. `Upon termination of the next step, wide
sections of the population and banking systems would start buying out
great amounts of foreign currency to secure themselves against
losses. As a result, CBA would be forced into selling more foreign
currency offering more possibilities for speculators to increase their
incomes.’