YEREVAN, November 19. / ARKA /. The average exchange rate of U.S. dollar at NASDAQ OMX Armenia stock exchange last week fell by 0.68% to 406.94 drams with weekly trading amounting to $15.06 million, which was two times higher than in the previous week. The average selling rate of a cash dollar fell by 0.65% to 408.38 drams on Saturday. We think the stable situation is due to continued demand of importers and individuals for the greenback, as well as to moderate devaluation moods.
This week the U.S. dollar is very likely to lose its value against Armenian dram to 405 drams at ASDAQ OMX Armenia stock exchange. The decline will be backed also by ongoing but limited domestic demand. Another factor behind the declining value of the greenback is the falling amount of purchases of the U.S. currency by individuals and businesses. Indeed, according to a Central Bank of Armenia survey, local commercial banks sold last week $5.03 million at linter-bank market, which was 11.85% less than the previous week. This in mind we project that the average selling rate of cash dollar in Armenia this week will be within 406.0 – 411.0 drams.
At the beginning of last week the European single currency could to a certain degree strengthen its position, but the motion was uncertain amid weak macroeconomic data in the eurozone. Indeed, the drop in annualized euro area GDP in the third quarter accelerated from 0.5% to 0.6%. The index of business activity in Germany from ZEW institute in November fell to 15.7 vs. projected 10.0. Data on industrial production in the euro zone did not add optimism either.
However, at the end of the week the euro resumed its decline again, surrendering all its positions. Against this background, and because of the growth of the Armenian dram against the U.S. currency , the average selling rate of euro past week decreased by 0.52% to 522.54 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. Of American news we would like to pay attention to the publication of data on the number of initial unemployment benefit claims last week, and the numbers from the housing market in October. Of European news we would like to pay attention to publication of data on German GDP for the third quarter and the index of German business confidence from the IFO Institute for November. All this in mind we project that the average selling rate of cash euro in Armenia this week will probably be within the 515 – 530 drams.
The average selling rate of the Russian ruble last week declined by 0.92% to 12.97 drams due to the depreciation of the Russian ruble against the U.S. dollar, and an increase in the cost of of Armenian dram. The average value of the ruble against the U.S. dollar and, therefore, the dram this week ill depend on the macroeconomic data from the U.S. and the euro area, as well as the dynamics of oil prices. We project that the average selling rate of cash ruble in Armenia this week is likely to be in the range of 12.85 – 13.15 drams.
Mikael Verdyan, analyst for GC FOREX CLUB, specially for ARKA
Views of the author do not necessarily represent those of the agency
