RADICAL OPPOSITION OF ARMENIA FORECASTS NEW SHARP DEVALUATION OF NATIONAL CURRENCY IN NEAR FUTURE

ArmInfo
2009-12-22 13:36:00

ArmInfo. The economic commission of the radical oppositional Armenian
National Congress (ANC) has made a statement forecasting new sharp
devaluation of the Armenian dram in the near future.

According to ANC statement, Central Bank of Armenia carried out big
interventions in the currency market over the last weeks, having
directed $150 mln from foreign reserves and, thus, suppressed the
natural devaluation of the dram. The statement also says that the
dram rate consolidated by over 15 drams during the latest days in
the largely dollarized market, when the savings by the population
started entering the market in view of the New-Year holidays. "So,
the authorities did their best to enable the oligarchs, importing
products, to acquire a cheap currency, due to the state reserves –
in one case, and due to theft of the population’s savings – in another
case", the statement says.

According to the statement, ANC has multiply called on the country’s
authorities to follow a floating rate policy and not to lose the
foreign reserves, which are further replenished due to the daily
growing foreign debt. ANC thinks that a result of CB’s current policy,
sharp devaluation of AMD will take place in the near term, that will
negatively affect the economy. According to ANC, the current economic
and financial policy of Armenia does not suppress the deepening crisis,
moreover, it serves enrichment of the oligarchic authorities and
more deepens the consequences of the crisis. "The decision remains
the same: recovery of the Constitutional system, approval of a legal
power elected by the people", ANC statement says.

To note, the statement by the opposition somewhat conflicts with a
seasonality of the dram rate flow in Armenia’s "transfer economy" on
the eve of New Year holidays, when a large amount of foreign currency
is thrown in into the market. Moreover, according to Armenian CB
data, the latter bought up about $8.5 mln from the market at 373,61
AMD/$1 rate over the latest days in order to level the exchange
rate fluctuations.