YEREVAN, June 15. /ARKA/. Armenian companies still need to learn how to manage market risks, Deputy Chairman of the Central Bank Nerses Yeritsyan said in an interview with the Public Television of Armenia in a comment on a drastic depreciation of the US dollar against the Armenian dram.
Armenia’s currency, the dram, has strengthened against the US dollar by more than 25 percent since the middle of March. Analysts say one of the reasons behind this unprecedented rally of the dram is the arrival of thousands of Russians to Armenia (after Russia launched so-called special operation in Ukraine) who opened thousands of bank accounts here.
‘All over the world business entities, besides their own business, also manage risks and uncertainties stemming from the market, and they have tools for that. Unfortunately, market risk management culture is not formed in Armenia yet and for a long time we have been trying to develop the market of derivatives, which protect companies from market fluctuations,’ he said.
According to Yeritsyan, the current situation with the exchange rate is a normal fluctuation. He said the Central Bank has had no role in the strengthening of the dram against major foreign currencies.
“It is an external sector phenomenon – there is a growth in external demand, rapid growth in exports, capital inflows – in these conditions, the exchange rate is revalued. Volatility has been observed throughout the history of the dram, we must learn to manage this volatility, this market risk,” he said.
Yeritsyan noted that the devaluation of the dollar is not only due to the inflow of currency into the country.
“Also the current account has improved, exports are growing at a high rate, there is a significant increase in money transfers from individuals, there is also an inflow of other capital funds, which should be evaluated over time,” he explained.
Asked whether the strengthening of the dram does not contradict Armenia’s export-oriented policy, Yeritsyan said inflation in the partner states are also taken into account.
According to the numbers, released by the National Statistical Committee (NSC), Armenia’s foreign trade in the first four months of 2022 amounted to over $2.9 billion, having grown by 33.8% from the first four months of 2021.
Armenian exports in January-April 2022 grew by 25.2% compared to January-April 2021 amounting to a little over $1 billion, while imports during the reporting period totaled about $1.9 billion, an increase of 39.1% compared to January-April 2022. -0-
