{"id":98390,"date":"2016-05-26T14:47:51","date_gmt":"2016-05-26T14:47:51","guid":{"rendered":"https:\/\/armbanks.am\/2016\/05\/26\/244730\/"},"modified":"2024-12-15T13:23:54","modified_gmt":"2024-12-15T13:23:54","slug":"chzmachyan-says-sharp-devaluation-of-dram-to-favor-exporters-poses-macroeconomic-risks","status":"publish","type":"post","link":"https:\/\/armbanks.am\/en\/2016\/05\/26\/98390\/","title":{"rendered":"Chzmachyan says sharp devaluation of dram to favor exporters poses macroeconomic risks"},"content":{"rendered":"

YEREVAN, May 26. \/ARKA\/.<\/strong>\u00a0 Sharp devaluation of the dram, Armenia\u2019s national currency that could open up new prospects for Armenian exports, carries significant macro-economic risks, according to Samvel Chzmachyan, the\u00a0 chairman of the Union of Banks of Armenia.<\/p>\n

Speaking today at a meeting of the International Banking Council in Yerevan, he said some CIS countries practice artificial depreciation of their national currencies against\u00a0 US dollar and\u00a0 euro to promote national exports.<\/p>\n

“Many countries with high, sometimes double-digit inflation, resort to aggressive devaluation of the national currency, which, apart from short-term positive effects, does not promise anything good in the medium and long term,\u2019\u00a0 he said.<\/p>\n

He said\u00a0 different trends dominate in Armenia. In particular, the Armenian dram depreciated against the US dollar in 2014 by almost 15%, and by 1.5%\u00a0 throughout 2015 appearing to be the most stable currency across the Eurasian space.<\/p>\n

According to Chzmachyan,\u00a0 devaluation of the Armenian dram carries serious risks. In particular, as a result\u00a0 almost immediately imports from third countries\u00a0 become more expensive, as well as local products, made of imported raw materials and components. Moreover, imports from Russia, represented mainly by energy carriers, are also calculated in US dollars.<\/p>\n

He went on to say that the devaluation of the national currency threatens the savings of the population, which in turn\u00a0 reduce their purchasing power and lead to\u00a0 further impoverishment. It has also\u00a0 such negative macroeconomic consequences, as rising\u00a0 inflation, a new wave of distrust in the national currency and, consequently, the growth of dollarization. This could entail intensive outflow of financial resources.<\/p>\n

This, according to Chzmachyan, may damage both the banks\u2019 dollar assets and borrowers, especially those who were provided with loans in foreign currency. He added that in Armenia the share of non-performing loans has increased from 6-7% in 2015 to 10%.<\/p>\n

Under these conditions, according to Chzmachyan, the financial authorities reject creation of favorable financial conditions for relatively small layer of exporters. He said\u00a0 total exports do not exceed US$1.5 bln. According to him, the government uses other instruments to help largest exporters.<\/p>\n

Chzmachyan said in choosing between importers and exporters it is not profitable for the government to support exporters because exports are exempted from VAT, while importers pay VAT and customs duties.<\/p>\n

Chzmachyan also noted that a decline in prices has restored to some extent the competitiveness of Armenian goods, but did not completely neutralize the continuing depreciation of the national currencies in partner countries, as evidenced by the strengthening of the real effective exchange rate of the dram.\u00a0 -0-<\/p>\n","protected":false},"excerpt":{"rendered":"

Sharp devaluation of the dram, Armenia\u2019s national currency that could open up new prospects for Armenian exports, carries significant macro-economic risks<\/p>\n","protected":false},"author":1,"featured_media":157369,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":"","tstyn_error":""},"categories":[12159,9216],"tags":[13611,12635,12345],"class_list":{"0":"post-98390","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-exchange-market","8":"category-news","9":"tag-chzmachyan","10":"tag-devaluation","11":"tag-dram"},"acf":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/armbanks.am\/en\/wp-json\/wp\/v2\/posts\/98390","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/armbanks.am\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/armbanks.am\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/armbanks.am\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/armbanks.am\/en\/wp-json\/wp\/v2\/comments?post=98390"}],"version-history":[{"count":0,"href":"https:\/\/armbanks.am\/en\/wp-json\/wp\/v2\/posts\/98390\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/armbanks.am\/en\/wp-json\/wp\/v2\/media\/157369"}],"wp:attachment":[{"href":"https:\/\/armbanks.am\/en\/wp-json\/wp\/v2\/media?parent=98390"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/armbanks.am\/en\/wp-json\/wp\/v2\/categories?post=98390"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/armbanks.am\/en\/wp-json\/wp\/v2\/tags?post=98390"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}