CB Regulates Currency Fluctuations


[07:30 pm] 22 June, 2007

`Dollar-dram fluctuations in Armenia are not conditioned by economy
and international tendencies,’ said economist Eduard Aghajanov in
answer to A1+’s question.

The exchange rate is determined by a group of people, i.e. economy,
international currency policy and market state do not affect Armenia.

-Whom do you mean?

The dram depreciation is profitable for importers. The foreign trade
deficit increases. In my opinion, this year the deficit will exceed
$1.5 – 2 milliard as the current rate promotes import and hinders the
growth of the national output.

Does the President of the Central bank Tigran Sargsyan support these

Surely, he does. He confessed it. By 2005 he had cheated everyone
saying that the dollar rate was free in Armenia and he had no
connection with the dollar-dram movements. In 2005 he announced that
the Central Bank regulated the currency fluctuations.

How long will the fluctuation last?

It depends on the appetite of the interested groups.

Do you foresee dram depreciation?

It depends on the interests of the above-mentioned groups. The dollar
rate went up in April as they needed dram during the elections.

Can the dollar rate go up in 2008 during presidential elections?

I don’t exclude it. They need the dram to give briberies. They
collected the dram in April and the exchange rate fell. And now they
have fixed cheaper price for the dollar.

And what factor is the gold price determined by?

By the dollar. In case the dollar price goes up at the international
market, the gold price falls and the vice versa. Banks and great
businessmen store gold.

-How did the election affect the Armenian economy?

Armenia is the only country where elections do not affect the
economy. During the 2003 presidential and parliamentary elections
Armenia had the highest economic growth- 13.9 per cent. The same scene
was observed after the 2005 referendum.

And how do elections affect economy in developed countries?

Generally, political activeness surpasses economic activeness as
people are more interested in policy than in economy.

Then, why do we have the opposite picture in Armenia ?

The answer is evident. Armenia differs from other countries. We are
unique. I cannot find any other explanation.

Knarik Isoyan

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