FORMER GOVERNOR OF CENTRAL BANK SAYS RISK OF DRAMATIC DROP IN THE VALUE OF DRAM STILL PERSISTS

10.04.2015 16:58

YEREVAN, April 10. / ARKA /. A former governor of Armenia’s Central
Bank Bagrat Asatryan said today the risk of another dramatic drop in
the cost of the national currency, the dram, still persists.

He recalled that the Central Bank’s reserves slashed by $750 million
alone in 2014 and by another $200 million in the first two months
of 2015 because the regulator had to sell that amount to try to
stabilize the exchange rate of the dram. According to Asatryan,
these moves jeopardize the exchange rate of the dram and may lead to
another dramatic fall in the value of the national currency.

Asatryan praised the Central Bank for taking necessary measures late
last year to stabilize the dram’s exchange rate, however, said in
the present circumstances the regulator should abandon the policy of
intervention to maintain the exchange rate of the dram.

Asatryan said the Central Bank should not have responded to the
weakening of Russian ruble last December, although Russia is Armenia’s
major economic partner, ‘because the impact of Russian economy on
Armenia is inevitable and natural.”

“We must not oppose the formation of the real market value of
our currency, and the Central Bank should abandon the policy of
intervention to maintain the dram’s value, because abandoning that
policy is likely to boost economic development,” said Asatryan.

Armenia’s international gross reserves surged by 18.1% in 2015
March to $1.491.5 billion, according to a provisional Central Bank
of Armenia report. Foreign assets in convertible currency stood at
$1.490.9 billion and the Special Drawing Rights (SDR) with the IMF
were worth $0.7 million.

In 2014 Armenia’s gross international reserves slashed by 33.8% or
$762.3 million to $1.489.3 billion. The reduction continued into 2015.

In February they stood at $1.260.9 billion. -0-