ANDRANIK TEVANYAN: EXCHANGE RATE SURGE WON’T LAST MORE THAN A WEEK
PanARMENIAN.Net
03.03.2009 18:00 GMT+04:00
/PanARMENIAN.Net/ "The current situation in Armenia is the result of
monetary, budget, and financial policy of Armenia’s Government and
the Central Bank," as the head of "Polyteconomia" Research Center,
economist Andranik Tevanyan, informed the PanARMENIAN.Net reporters. As
he claims since 2007 about $2.5 billion have been aimed at keeping
the dram rate in balance and the budget became an end in itself. Now
when Armenia has failed to receive financial support in the amount
she expected and less than $1billion have been left from the means
"talked-up," the problem of bankruptcy has arisen. So the Central
Bank had to act as a dilettante, i.e. had to decrease the dram rate,
thinks the analyst. Tevanyan also mentioned that considering the
experience of developed countries, the fluctuating rate policy should
have been implemented in due time and in small corridors, In our case
the Central Bank of RA and the Government, pleading the world crisis,
announced about the fluctuating dram rate, allowing the market to
set up the rate.
When asked how long the dram rate surge will last,Tevanyan answered
that according to his calculations- one week at most, then it will
balance. What refers to the highest point, the basic factor here is
the expectancy factor of the population-it will cut down on consumption
in order to save up.
Central Bank’s new policy will have a negative effect on the
least protected areas of the market, in particular, on a small and
average-scale business as well as on the country’s population. As
Tevanyan informed society is panic-stricken, some stores have been
shut down, the work in the Customs is suspended, the prices on imported
goods are expected to rise. So, under the current inflation pressure,
in order to avoid the situation of the 90’s, the RA Government has to
take up adequate measures, i.e. to weaken the tax burden according to
the proportion of national currency slump. As a result, the budget’s
revenues, according to Tevanyan, will decrease by 20%, whereas the
dram has fallen in much the same amount.
Only yesterday the dollar rate at currency exchange offices was 305-310
drams for one dollar, the euro rate was 387 drams. The basic cause
for such a sudden boost of currency rates against the dram was the
statement made by the head of the Central Bank, Arthur Javadyan. It
said that that the Central Bank had come up with the decision to
restrict its interference in the foreign exchange market and to go
back to the policy of fluctuating rates. Besides, accordong to Central
Bank’s calculations, the average dollar rate in 2009 is expected to
be between 360-380 drams.