SHOCK HAS COME FROM OUTSIDE – CBA CHAIRMAN
18:46 * 09.12.14
Chairman of the Central Bank of Armenia (CBA) Arthur Javadyan invited
a press conference on Tuesday to explain the cause of the latest
depreciation of the Armenian dram.
The “shock has come from outside.” One of the causes is global
developments.
“Amid economic developments in the United States, developed
and developing countries recorded depreciation of their national
currencies. Along with the economic recovery in the United States,
the US Federal Reserve System has not implemented its Quantitative
easing (QE) program for the last year, which enabled US $85bn monthly
injections by through the purchase of government securities. The
second factor is regional developments. This impact on the CIS has
been intensified by regional geopolitical problems and by a decline
in oil prices. The two factors caused a slump in economic growth in
Russia and rouble depreciation,” Mr Javadyan said.
With respect to domestic developments, Mr Javadyan said that Armenian
economic entities exacerbated the situation by converting their
surplus funds into hard currency in the hope of profit in AMD terms.
“Such steps are highly risky. The world’s experience shows that
panic causes a wider spread. In such situations we advise against
unnecessary conversions.”
As to measures the CBA is taking, Mr Javadyan said that all the banks
have been provided with foreign currency, offered exchange swaps and
interventions to cushion fluctuations. The CBA is trying to prevent
abuse on Armenia’s foreign exchange market.
From: Emil Lazarian | Ararat NewsPress
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