Dram will continue to devaluate
The Armenian dram rapidly devalued in recent days. Today the dollar is sold at 402-407 drams.
"In the past the Central Bank frequently resorted to non-market methods by exerting pressure on exchange points, applying penalties, etc. Today, the "bullying" has weakened and we witness gradual inflation," Ara Nranyan, member of the Armenian Revolutionary Federation (Dashnaktsutyun) said in the National Assembly today.
"The government has done nothing to seek financial redress for the losses inflicted on our citizens," he added.
During our visit to exchange points we found out that people are selling more foreign currency these days. Employees of exchange points even predict reoccurrence of March 3, 2009 if the dollar continues devaluating at the same rate.
Armenia's ex Prime Minister Hrant Bagratyan says the dram was once appreciated by the Central Bank.
Today we also have a negative remnant of payment balance. "We do not export any goods. We do not earn dollars. We live on money sent from foreign countries and buy everything with dollar. Armenia's domestic production has died away. On the other hand, we are an importing country and have import monopolies. Importers are interested in keeping the exchange rate stable."
Asked whether the government might take steps to prevent further devaluation, Mr. Bagratyan said: "They can not bring down the price as they have no money. Besides, the reserves of the Central Bank are controlled by the International Monetary Fund (IMF)."
Hrant Bagratyan predicts further devaluation of the dram in the coming six months.
"I think Armenia can take credits and try to curb the tendency otherwise the exchange rate will rise to 420-450 drams," he notes.
"With the advance in gas tariff we can anticipate increase in water price, transport, electricity and everything," he concluded.
As of March 17, prices of some goods have already gone up.
