YEREVAN, June 4, /ARKA/. A former chairman of Armenian Central Bank said today Armenian national currency, the Dram, is not threatened by a redenomination. Bagrat Asatrian, who served as Central Bank governor in ex-president Levon Ter-Petrosian’s administration, said redenomination is not just a technical issue.
‘For the authorities to enforce redenomination there should be prerequisites for qualitative changes in economy, when robust economic growth is guaranteed. Otherwise arithmetic will be arithmetic and removing one or two zeros from Armenian Dram will give nothing to the economy,’ he said.
According to him, making forecast about the exchange rate of USD against Dram is a thankless job.
Armenia’s national currency continues to gain strength against the greenback and was trading on May 3 at 376.72 per one USD. The highest exchange rate of USD against Dram was recorded on March 18 when it was trading at 404.36 Drams. According to Bagrat Asatrian, the fluctuating exchange rate policy of the Central Bank is the only right one that can have a positive impact on the economy.
Speaking about inflation he, challenged the official statistics which say the consumer inflation rate was 5.3% this year. According to him, the real inflation rate is higher. According to official figures, food products prices rose by 7% from 2009 December, prices of non-food goods rose by 4% and those of services by 3.2%.
“Unfortunately, prices of foods grow faster than others. For example, the price of potato surged by 11% and that of cabbage by 33%,’ he said. The trend in Armenia, he said, is contrary to what is happening at global markets, where the price of wheat in the first quarter dropped by 15.6% from 2009, that of rice by 7.5% and the price of sugar by 5%. -0-
