CBA PUTS 100,000 AMD NOTE INTO CIRCULATION

Information-Analytic Agency NEWS.am
Aug 24 2009
Armenia

The Central Bank of Armenia (CBA) has put 100,000 AMD banknotes
into circulation today. Talking to journalists, CBA Board Chairman
Vakhtang Abrahamyan reported that 50,000 AMD banknotes constitute 7%
of the cash in circulation, and the CBA expects the new, 100,000 AMD,
banknotes to constitute 3% of the amount.

As to whether this suggest AMD devaluation or is pregnant with a price
rise, Abrahamyan said that the studies showed no reasons for concern.

"First, since they were put into circulation, 50,000 AMD banknotes
have been serving the country’s economy and presently constitute 7%
of the cash in circulation. We think that the 100,000 AMD banknotes
will constitute 3%, which cannot cause any rise in prices. Secondly,
we have considered the experience of a number of countries (Denmark,
Switzerland, Czech Republic, Baltic States), which shows it facilitates
circulation and allows large-scale transactions to be effected in
terms of other currencies," Abrahamyan said.

As to what is the sense of putting 100,000 AMD banknotes into
circulation if 50,000 AMD banknotes constitute only 7% of the total
cash in circulation, Abrahamyan said that the measure is supposed to
make large-scale transactions easier for people.

The CBA Board member also expressed the opinion that the measure
will not cause an increase in the cash amount in circulation, as the
newly printed 100,000 AMD banknotes have nothing in common with the
CBA-implemented programs, which, in turn, are aimed at reducing the
share of cash in circulation and facilitating cashless payments.

From: Emil Lazarian | Ararat NewsPress