YEREVAN, March 25. /ARKA/. Arsen Ghazaryan, chairman of the Union of Manufacturers and Businessmen of Armenia, finds the dram/dollar exchange rate ratio ranging between 410 and 425 drams per one dollar normal for 2010.
The Armenian national currency has weakened by 19.82 percentage points from AMD 384.54 per one dollar on March 1 to AMD 404.36 on March 18.
However after that, the dram started a reverse movement and strengthened up to AMD 394.40 per one dollar.
Ghazaryan said that the exchange rate should be determined by market, and the central bank should try to mitigate, not curb the downfall.
“Market should form predictability, and the central bank’s policy should lessen risks. The regulator should interfere in the process smoothly and not frequently to let the market form exchange rate, since despite powerful monopolies, there is a strong competition on Armenian market, and Armenian businessmen are quite flexible.”
If the situation is predictable, entrepreneurs can outline own plans, respond to forex developments and make their businesses predictable.
Businessmen’s confidence in the national currency is growing, and the dram revaluated or devaluated by natural market propels market development, while an artificial setting of exchange rates undermines public confidence in the national currency, especially amid high sensibility of the financial market.
Ghazaryan said that the precipitous devaluation of the dram within one day has struck hard at Armenian economy.
It was the most painful shock for the national economy amid the crisis.
“Today we should do whatever necessary to shield the market from shocks and losses,”, Ghazaryan said.
On March 3, 2009, after the Central Bank of Armenia announced return to floating exchange rate policy, the dram plunged 66.36 percentage points against the dollar, compared with the previous day, to AMD 372.11 per one dollar. -0–
