YEREVAN, September 18. /ARKA/. The average exchange rate of U.S. dollar at NASDAQ OMX Armenia stock exchange last week dropped by 1.34% to 407.24 drams with weekly trading amounting to $17.55 million, by almost two and a half times more than in the previous week. The average selling rate of cash greenback fell by 1.00% to 409.57 drams on September 15 due to decline of U.S. dollar’s value at international currency markets on the backdrop of the Federal Reserve Bank’s decision on economy stimulating measures.
This week, against the background of anticipated decline of the U.S. currency at FOREX markets and in light of the U.S. Federal Reserve decision, the greenback is very likely to continue the descent. In our opinion, this decline is likely to mark a medium-term upward trend of the Armenian currency if the expansion of the monetary and credit policy of the American regulator leads to increased inflationary risks.
The decreasing demand of businesses and public for the greenback in Armenia last week is another factor that will be pushing the cost of the greenback down against the Armenian national currency. According to the weekly review of the Central Bank of Armenia, net sales of US Dollars by commercial banks last week amounted to $10.8 million, which was 42.36% less than the previous week. The average selling rate of cash dollar in Armenia in the coming week is likely to be within 406.0 – 411.0 drams.
The cost of euro last week in Armenia was determined by developments at FOREX markets, where EUR/USD rose 2.43% to 1.3126. The positive background at the beginning of the last week trading was due to hopes that the U.S. regulator will announce new measures to stimulate the economy, as well as by the positive decision of the Constitutional Court of Germany on the permanent eurozone crisis fund.
On September 13 the single European currency got a significant growth impetus after the U.S. Federal Reserve announced the launch of a major purchase of bonds as part of a plan to stimulate U.S. economic recovery. The average selling rate of cash euro in Armenia the past week rose by 1.86% to 538.33 drams.
This week the euro dynamics in the world and, consequently, in Armenia, will be determined by economic news from the U.S. and the eurozone. The average selling rate of cash euro in Armenia will probably be within 530 – 545 drams.
The average selling rate of cash Russian ruble last week rose by 2.34% to 13.46 drams due to the rising cost of the Russian ruble against the U.S. dollar after the decision of the U.S. Federal Reserve. The cost of the ruble against the U.S. dollar and, consequently the Armenian dram this week will depend on macroeconomic data from the U.S. and the euro area, as well as on the dynamics of oil prices. Even if the economic data is mixed, high oil prices and the decision of the Federal Reserve on new economy stimulating measures will support the ruble. However, if data from the U.S. is better than expected, it may trigger the growth of the U.S. currency, thereby putting pressure on the cost of the Russian currency. The average selling rate of cash ruble in Armenia this week is likely to be in the range of 13.30 – 13.50 drams. -0-
By Mikael Verdyan, analyst of GC FOREX CLUB, specially for ARKA.
The opinions of the author do not necessarily represent those of ARKA.
