YEREVAN, November 25. / ARKA /. The latest adjustment of Armenia’s national currency, the dram’s exchange rate is prompted by the need to make Armenian exports more competitive and preserve the Central Bank’s reserves, a Central Bank Board member, Armenak Darbinyan, told a news briefing today.
The dram began losing its value against US Dollar in October. The depreciation accelerated this past Monday, when the dram’s average exchange rate shot from 419 to 435 per dollar, the highest exchange rate in the last 8 years.
Darbinyan attributed the dram’s weakening, to “recent developments in the regional and international financial markets,” highlighting the worsening economic situation in Russia, Armenia’s major trade partner and partly in Ukraine, the depreciation of the Russian ruble and the falling price of commodities at international markets.
He said apart from being Armenia’s major trade partner, the bulk of money transfers also comes from Russia, which is also the largest foreign investor in the Armenian economy and ‘naturally what happens there can not fail to affect the Armenian market.”
“Armenia could not miss the spillover effect of all of this. The pressure on the foreign exchange market over the past two weeks has increased significantly and that in mind we had to adjust the exchange rate of our currency, otherwise we would face serious negative consequences,” said Darbinyan.
He, in particular, argued that the devaluation of national currencies in Armenia’s trade partner countries were making Armenian exports less competitive, which could cut exports, and as a consequence cut also jobs and incomes. According to him, a stronger dollar will increase the dram equivalents of the remittances sent home by Armenian labor migrants from Russia.
According to the Central Bank, the dollar has grown by 5.8% in November. The Central Bank injected $60.7 million in the local forex market over the last three weeks to support the dram. Overall, it has sold about $203.4 million this year. Meanwhile, the euro’s exchange rate has grown by 19.38 drams from November 21 to 539.53 drams on November 24. ($ 1 – 433.68 drams). -0–
