DRAM LOSING ROLE IN ARMENIAN ECONOMY, CBA EX-CHAIRMAN SAYS

news.am
March 30 2010
Armenia

As of this January a 25% decrease in the amount of private transfers,
one of the movers of economic development, was registered in Armenia,
the ex-chairman of the Central Bank of Armenia (CBA) Bagrat Asatryan
told reporters on March 30.

This year Armenia is likely to receive less funds than last year,
so it will be a hard year for the country, Asatryan said.

Speaking of the Armenian banking system, he pointed out that USD
investments have actually decreased despite the claims that they
are increasing. That is, banks continue attracting credits, but they
are not investing in economy as much as they did before. As a result,
the banks have more funds to utilize than they actually need. Asatryan
also pointed out high-level dollarization of the Armenian economy.

"The Armenian dram does not play such an important role in the Armenian
economy as before, and the Central Bank’s intervention is one of the
causes. The AMD supply is decreasing – 274bn AMD this March against
344bn AMD in 2008. The AMD supply has decreased by 45bn AMD over
the last three months. In fact, the dram supply is not sufficient
for dram depreciation, but it continues depreciating, which can be
accounted for by political and other factors," Asatryan said. Among
the causes is, according to him, "flight of capital from the country",
as well as monopolized economy.