YEREVAN, December 9. / ARKA /. The adjustment of the exchange rate of the national currency, the dram, will increase inflationary pressure by 1.5%-2% in the current quarter, Central Bank chairman Artur Javadyan said today.
The Armenian dram began losing its value on November 24 when it lost 16.6 points against USD falling to 435 drams per $1, updating the 8-year high. On December 8 the value of the greenback overcame the psychological mark of 450 drams trading at 455.08 drams.
According to Javadyan, the exchange rate of currencies is an important but not decisive factor in forming inflation. He said the fluctuations in exchange rate affect the prices of imported goods, which account for about 37% of the consumer basket in Armenia.
He explained that the impact of the exchange rate on prices depends on various factors, such as the structure of markets, the availability of competitive products, the elasticity of demand and etc.
“According to our estimates, the weakening of the dram will result in additional inflationary pressures of 1.5-2% in the fourth quarter this year and in the first quarter of 2015 after which the impact will be leveling during the year”, said Javadyan.
He said the Central Bank projects that the 2014 and 2015 inflations will be within the target band of 4% (± 1. 5%).
According to the National Statistical Service, the inflation in January-November 2014 was 2.8% higher year-on-year. The government’s projection of the inflation for this and next year are also within the 4% (±1. 5%) target band. ($1 – 455.08 drams). –0–
