YEREVAN, December 5. /ARKA/. The current no-forex-trade situation in the Armenian stock exchange is caused by high level of uncertainty that reflects the situation in the Russian foreign exchange market, head of mathematical modeling at the Armenian State University of Economics Professor Ashot Tavadyan said.
No USD transactions were carried out in NASDAQ OMX Armenia on Thursday for the third consecutive day. Dollar bid price was 447 drams per $1 on Thursday December 4.
Since the beginning of the year, ruble versus dollar rate dropped by more than 30% and continued falling to record lows. On Thursday the rate was above 52 rubles per dollar and 65 rubles per euro. Several factors contributed to the 2014 ruble depreciation in the international markets, including the Ukrainian crisis and anti-Russian sanctions and reduction in oil prices.
Tavadyan has not ruled out that restrictions were applied curbing demand satisfaction.
‘It is possible… Any methods are used in force-majeure circumstances. Since our inflation is higher than in the European countries and in the US, it would be much more rational if dram rate was being lowered, as our president used to say at the time”, Tavadyan said.
Such restrictions under force majeure prove to be unjustified, he added.
In commenting several banks’ limitations of dollar sale the expert said it is an administrative decision to have currency speculations under control in an uncertain situation.
In responding the question about the central bank’s decision to raise the Lombard repo rate from 10.25% to 21% Tavadyan said Lombard rate and refinancing rate in reasonable countries are much lower than inflation.
“The thing is that imports to GDP relation in Armenia is 45%, and it is obviously not the rates, but the exchange market situation that play a great role”, the expert said.
When the dram rate changes, prices for imported goods rise sharply and no rate adjustment can help it, he said.
“More rational actions are needed in the exchange market”, Tavadyan said.
Raising the Lombard repo rate may somehow provoke bank liquidity risks, according to the expert.
“In raising the interest rates, we should always keep in mind that the monetization level is very low in our country – about 36%, as compared to more than 45% in Russia. Raising the rate is unacceptable in these circumstances”, Tavadyan said.
