YEREVAN, July 28. /ARKA/. The Armenian national currency, the dram, will keep on losing its value against the greenback and under the best scenario may drop to 425 drams per one USD, and under the worst-case scenario to 460-470 drams, Mikael Verdian, an expert for Forex Club, told a news conference today.
He predicted that the exchange rate of the dram will start stabilizing in July, but it will not appreciate and the depreciation trend may continue into 2013.
In comments why no foreign exchange transactions were effected yesterday at Nasdaq OMX stock exchange, he said the reluctance of the Central Bank to intervene makes market participants to hold back their foreign currency. This is why the regulator makes short interventions to mitigate those fluctuations that may occur in the market.
No transactions in USD or euros were effected at NASDAQ OMX Armenia stock exchange on June 27. The latest transactions were on June 26, when the U.S. dollar average exchange rate was 417.25 drams.
Verdian noted that in comparison with sharp devaluation in 2009, current developments in the foreign exchange market are more balanced, and the depreciation of the dram against the dollar did not entail turmoil in the financial market.
Forex Club analyst said that demand for the dollar in Armenia will grow against the background of external developments related to tension in global markets, but he refused to tie the strengthening of the dollar with political events in Armenia and the upcoming 2013 presidential election.
According to him, in the worst case scenario at external markets the government in Yerevan will need to use innovative tools to curb inflation, which can become a serious challenge for the economy.
“This is why it is important to enforce strict supervision of imported products so that major importers could use financial tools to mitigate price fluctuations for the citizens”, said Verdyan.
He said a way to contain inflation is to stabilize the national currency, which is possible through economic diversification and use of innovative financial instruments, “including stock market instruments – futures and options, which allow managing price fluctuations.”
Armenian currency lost 6.2% of its value against USD since May. On June 27 one USD traded at 417.61 drams. -0-
