YEREVAN, November 22. / ARKA /. Armenia’s national currency, the dram, has turned 20 today. The process of replacing Soviet rubles with the new national currency began on November 22, 1993. Armenia that was in dire straits was the last former Soviet republic to introduce its own currency.
But very soon, actually after 10 days, the Central Bank shifted from the policy of maintaining a fixed exchange rate of the dram against the U.S. dollar to the floating exchange rate. This policy has been maintained since then.
Over these years the dram has experienced many difficulties to get stronger and break the total mistrust of citizens. Two decades of circulation show that the dram has entered the stage of stability as the confidence of citizens in it grows.
According to the Central Bank of Armenia, in the first nine months of 2013 the amount of money supply amounted to 1.457.9 trillion drams, an 8-fold increase over the past 10 years. Some 47.8% or 697.6 billion drams of the money supply were foreign currency deposits. Deposits in drams amounted to 404.9 billion drams and the amount of cash dram in circulation reached some 355.3 million drams.
Despite the relatively high level of dollarization of the Armenian economy, the confidence in the dram has grown as evidenced by the growth of bank deposits in the national currency. In the last 10 years deposits in the national currency have increased by 25 times, while deposits in foreign currency have increased by 14 times .
Experts tend to believe that due to the sound monetary policy of the Central Bank the Armenian currency has become stable and predictable. They say it will remain as such even after the country’s accession to the Customs Union. They also believe that in a few years when the economy stabilizes the dram may become partially convertible. -0-
