YEREVAN, December 9. / ARKA /. The Central Bank of Armenia expects an end to sharp fluctuations in the exchange rate of the national currency, the dram, in the near future due to a set of measures, it is implementing, Central Bank chairman Artur Javadyan said today. The Armenian currency has been down since late November when the greenback traded at 415 drams. Today one USD was trading at 455.08 drams.
According to Javadyan, the Central Bank has the situation under control. “All the banks were provided with cash currency without any restriction. He said it has offered also currency swaps and foreign exchange intervention to mitigate sharp fluctuations. He said in order to limit speculative currency trading the Central Bank raised the interest rate on Lombard repo from 10.25% to 21%. According to him, the regulator is working to detect abuses in the foreign exchange market and punish offenders. “In order to stabilize the situation we have developed a plan of actions with the support of international l experts and regional partners.
This means that the Central Bank will be selling a limited amount of hard currency to banks via daily auctions,’ Javadyan said. He said in the first week $6 million will be sold to banks daily, but later this amount will be reduced along with the falling demand for hard currency. “We do not view this as a departure from the policy of floating exchange rate, since such intervention is short-term and small when compared to the size of the market, and the Central Bank does not pursue any purpose of impacting the exchange rate”, said Javadyan.
On December 8 the Central Bank announced that it will be selling a limited amount of hard currency until the end of the year via daily currency auctions in order to stabilize the situation in the financial market. To ensure transparency of the auctions the Central Bank will publish daily information on their results. ‘In order to reduce the impact of the Central Bank on the formation of the dram’s exchange rate, the daily amounts of to- be- auctioned hard currency will be gradually reduced until the formation of a balanced exchange rate of the dram,’ the regulator says in a statement.-0-
