YEREVAN, September 28. / ARKA /. Armenian dram is set to gain slightly in strength in the coming weeks, Chief of IMF Mission to Armenia, Mark Horton, told Armenian reporters last Friday.
According to him, the situation in the local foreign exchange market is balanced, resulting from a correction of the external balance, reducing imports and stable exports.
Horton said Armenian Central Bank’s monetary policy was moderately restrictive, while the preservation of the money supply has allowed keeping the rate at a somewhat steady level.
“I do not think that these factors will change seriously this or next year. In the fourth quarter of 2015 and in the first quarter of 2016 the seasonal demand for natural gas will grow which may lead to an insignificant pressure on the exchange rate,” said Horton.
He said the Central Bank intervened in the situation periodically to keep the dram from depreciating, but in March this trend weakened until the developments in the Chinese market a few weeks ago and since then, the Armenian dram has stabilized and the Central Bank was able to recover some of the spent resources by buying out last week $20 million.
He said the IMF thinks that the possible development of the situation in the Russian and Chinese markets, as well as changes in metal prices may represent more serious risk for the exchange rate. According to him, this could lead to a change in the balance, but all will depend on the depth and duration of these processes.
He said the Armenian dram past week gained in strength and this trend may continue in the coming weeks, before the impact of certain seasonal factors, including the growth in gas demand.
He said linking the Russian ruble to Armenian dram is more psychological, as many Armenian labor migrants work there, who are faced with reducing income due to fluctuations in the ruble exchange rate. However, it is not grounded either by inflation or the structure of trade and other economic factors. In the future, there are risks, but they are unlikely to materialize, he said.
The Armenian dram has been strengthening since September 11, when the USD traded at 485.08 drams. Today Armenian currency rate had strengthened to 474.62 drams per $1 US. Strengthening of the national currency during the reporting period is attributed to the influx of dollar export revenues, which has been showing a positive trend in several months.-0-
