YEREVAN, July 11. /ARKA/. The Central Bank of Armenia sold total of $79 million at the forex market from early May to late June to ease currency teetering.
A number of outer and inner factors raised demand for the U.S. currency in Armenia over the recent several months. This, in turn, resulted in Armenian dram’s sharp devaluation. Within such tendencies the Central Bank of Armenia has conducted relatively slight currency interventions since May ensuring smooth devaluation of the national currency.
The data compiled by the analytical division of ARKA agency shows the devaluation reported 26 p.p. or 6.7% within May-June causing 0.4% drop in Central Bank’s foreign reserves in May. Nevertheless, such a sharp depreciation of the national currency didn’t resulted in significant price rising. Over the past 12 months prices climbed by 0.7%. A number of experts say actions by the regulator are pretty justified as they reduce the risks of sharp currency fluctuations and depletion of reserves.
In 2009 the instantaneous depreciation of the national currency by 66.3 points prompted significant inflation risks and had a negative impact on financial and economic system of the country. At that time CB supported the cost of the dram at the same level and as a result of shrink in foreign reserves it had to direct the Armenian dram to free floating. —0–
