No panic should arise around dram devaluation, armenian expert says

YEREVAN, May 30. /ARKA/. Head of Alternative analytical center, professor Tatul Manasaryan thinks that there is no need for panic around the recent devaluation of the Armenian national currency.

Over the recent two weeks the Armenian national currency has devaluated against the U.S. dollar by 13.34 drams or 3.4% (from 393.41 to 406.75 drams per $1). The maximum high rate of the USD against AMD was recorded on May 29 (406.75 per $1).

“I see some concerns around the currency fluctuation, but I wouldn’t like it to turn into some panic,” Manasaryan said Wednesday at the press conference in Novosti International press center.
According to him, the devaluation was mainly caused by outer factors, but he didn’t exclude some inner aspects either.

Manasaryan outlined the tendencies of U.S. economic activation which are growing into economic growth as a result of Obama save programs of 2009. These tendencies result in U.S. strong dollar and weak euro, he added.

“Principal pressure is also put by the global financial crisis which we regard as foreign debt crisis. Some countries are unable to say with certainty that they will manage to avoid financial default. Of course, in these conditions euro falls,” Manasaryan said.

Besides outer factors, the expert also mentioned economic silence of business community throughout pre-election period in the country. This phenomenon is common for a number of countries, he clarified.

Nevertheless, there are a number of factors that can oppose to the devaluation of dram. In reference to this, the expert said in case of conducting rational agricultural policy Armenia can ensure high rates of economic growth that will, in turn, strengthen the Armenian dram.

Manasaryan also reminded about the favorable export growth rates- 32%.

“We should just hope that this devaluation will not become a regular tendency of our economy, even though we understand that there is some dependence on particular sectors, but nevertheless I don’t deny that in late June-July we may face processes that will oppose the devaluation… I also don’t deny the possibility of some revaluation caused by political processes,” he said adding that the new parliament will be formed soon.

“If we don’t see any negative changes and this stable course will continue along with effectiveness, we will have a reason to get optimistic by the end of the year. And it will refer to either currency rate or inflation and economic situation,” Manasaryan concluded. E.O.—0–

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