Author: Badalian Vardan

Arstakh to live in peace soon – Tsvetana Paskaleva

18:46 * 28.01.15

Armenian President Serzh Sargsyan awarded Medal of Commendation to
Tsvetana Paskaleva, a Bulgarian journalist and documentary film
author, on Armenian Army Day.

In her speech, Ms Paskaleva said in particular:

“We have common memories and responsibility. The memories we always
pay tribute to and the responsibility for all that we have today. It
was achieved at the cost of the blood of the Armenian people’s sons
and tears of Armenian mothers. All of us, both here, in Karabakh and
abroad, must defend our borders.

“My dear soldiers who are on the border now, know that you are
protectors. Be brave and courageous and defend the borders with
credit. Dear parents, the loss is great and the wounds cannot healed.

“We will live on to see this day. I know it will happen this century,
we must just believe and work on it. Dear parents, we bow down before
you. We are sorry we could not save your children. They will remain
among heroes forever.”

Armenian army is the people’s army – Bako Sahakyan

09:50 * 28.01.15

President of the Nagorno-Karabakh (Artsakh) Republic Bako Sahakyan has
offered his congratulations to the president and the defense minister
of Armenia on the Day of the Army.

His address to President Serzh Sargsyan is below:

“Respected President Sargsyan,

“On behalf of the people and authorities of the Artsakh Republic and
personally myself, I sincerely congratulate you on the Day of the
Army, a dear and important holiday to all the Armenians.

“You have been standing at the very foundation of the national army’s
formation, and today, as a Supreme Commander-in-Chief of the Republic
of Armenia Armed Forces, you do all your best to increase the
Fatherland’s defense capacity.

“The Armenian Army is a people’s army. The best sons of our nation
contributed to the establishment of the Army, and today. their brave
sons devotedly carry out the sacred duty of defending the Fatherland.
We render homage and glory to all those whose have contributed to the
formation of a strong and efficient army, to those who maintain our
Fatherland’s borders steadfast, safeguard our people’s tranquility and
peaceful life.

“I once again congratulate you and the entire Armenian nation on this
memorable day, wishing you all peace, sound health, success and all
the best on the way towards the continuous strengthening and
prosperity-building of the independent Armenian statehood”.

“Localization” of War: Who Do They Think in Moscow?

Igor Muradyan, Political Analyst
Comments – 28 January 2015, 13:32

The Minsk Group Co-Chairs Called on Azerbaijan to Observe its
Commitments to a Peaceful Resolution of the Conflict

OSCE Chairperson-in-Office DaÄ?iÄ? voices concern over recent
developments on Armenian-Azerbaijani border and Line of Contact

Seiran Ohanyan: Peace Requires Confidence Building

Azerbaijan Filled with Panic

Conclusion of Forensic Examination of Karen Petrosyan Has Been Received

Cooperation of any country of Eastern Europe and Central Asia with
NATO and the United States has an anti-Russian vector, and Moscow
perceives it this way.

The present problems have occurred recently, some experts think they
have always existed but now they have become more tangible and acute
due to the rapprochement between NATO and Armenia.

The content of NATO-Armenia relations is not inferior to NATO-Georgia
relations, for example. The NATO-Georgia topic has become more common
in the strategic context, hence it is hardly possible to `blackmail’
Russia with the Georgian topic. Armenia is a `fresh’ topic that has
not been elaborated. Therefore, Armenia is currently seen as an
important lever of pressure on Russia, to thwart Russia’s attempts at
the strategic level.

The opportunities to combine cooperation with NATO and CSTO are
categorically rejected, though in this case it causes doubts and
expresses the position of not only the Russian political leadership
but also the military command and military circles.

In answer to the question how Russia perceives Armenia’s willingness
to cooperate with NATO the Russian experts suggested the following:

– Armenia would like to get assistance from Russia and NATO simultaneously;

– Russian foreign policy on Azerbaijan and Turkey causes doubts in
Armenia, which is wrong and is explained by the lack of political
experience of Armenian leaders;

– If formerly NATO-Armenia relations were `under control’ and were
understood by Moscow, now these relations have crossed the line, which
is evidence to Armenia’s involvement in NATOs’ strategic plans;

– Armenia has no real guarantee of security from NATO and will not get
that guarantee, at least in the format which would allow expecting
military assistance in case of a military conflict.

In answer to the question how `normal’ it is for Russia to supply
weapons to Azerbaijan, they state clearly: it’s normal. In addition,
arguments are brought, such as otherwise Azerbaijan will buy weapons
from other countries, and military technical cooperation with Armenia
is quite successful.

Then what attitude would Russia have to the supply of weapons to
Armenia by NATO member states? Russia knows about these intentions, it
is Armenia’s sovereign affair but these supplies will hardly be
large-scale and comprehensive, experts think.

At the same time, the Russian leadership has expressed its negative
attitude to this, questioning military technical cooperation with
Azerbaijan. Unfortunately, this opinion has not been taken into
account, explaining that the ministry of defense needs money and this
money is raised from export of weapons. This also causes doubts but
such is the decision of the political leadership.

In this situation Armenia must take care of its military potential and
may hope for Russia’s assistance which is not interested in weakening
of Armenia and change of balance of forces in the region in prejudice
of Armenia, experts say.

Parity in relations with Armenia and Azerbaijan does not mean equal
relations, it is impossible in both political and strategic terms. The
geopolitical setting in the region is quite different, and Armenia
remains the only military partner.

Do the Russian experts consider the Russian-Armenian relations as
strategic? The notion `strategic’ is not legal, it is figurative
rather. Important agreements have been signed and are implemented
between Russia and Armenia, and they need to be amended with new
content instead of considerations how to describe these relations as
strategic.

The opinion on `localization’ of the war between Armenia and
Azerbaijan is interesting. These arguments cause doubts but they do
express Russia’s stance and policy.

By supplying weapons to Azerbaijan Russia is trying to set framework
conditions, namely limitation of possible military actions by
Azerbaijan. Localization of military actions within the area of the
Karabakh conflict and not shifting it to the territory of Armenia is
taken into account.

Hence, Russia intends to create a wall between itself and a possible
military conflict. The Russian political leadership rules out Russia’s
involvement in regional military conflicts, and it concerns not only
the South Caucasus but also Central Asia.

To what extent is Russia conducting a policy of `localization’ of
possible conflicts with regard to Turkey? With regard to risk
assessment and attitude to conflicts broader relations have formed
between Russia and Turkey. Russia has Turkey’s perception on a
possible Armenia-Azerbaijan conflict in terms of unacceptability of a
military solution of the issue.

At the same time, it is assumed that resumption of the
Armenian-Azerbaijani conflict is seen as the result of large scale and
serious movement of policies of foreign parties on the region. Despite
immense procurement of weapons, Azerbaijan is not ready for a modern
war, and the great powers, including Turkey, are trying to explain
this.

Turkey’s military objectives relating to Azerbaijan are aimed at
prevention of bigger military conflicts than the Karabakh conflict in
which Turkey may be involved.

What is the cause of irritation of the Russian political leadership on
Armenia, Armenia’s aspiration to cooperate with the Euro-Atlantic
community, the reserved attitude towards the Eurasian project,
Armenia’s domestic problems? Experts find that rapprochement with NATO
and the EU has a key role in lack of confidence. Nevertheless, it is
impossible to ignore the Eurasian project in strategic terms.

This is personal insult because this initiative is personally Putin’s
initiative. Besides, the intactness of Russia’s positions abroad is
linked to the Eurasian project.

The western bloc of states is trying to prevent recovery of Russia’s
influence in the post-Soviet space, and rejecting the Eurasian project
may be considered as unfriendly policy on Russia in terms of its
strategic interests.

European Court holds hearing on Perinçek v. Switzerland case

13:02, 28 Jan 2015
Siranush Ghazanchyan

The hearing of the case Perinçek v. Switzerland has started at the
European Court of Human Rights.

Armenia is represented at the Court by Amal Clooney, Geoffrey
Robertson, Toby Collis and Armenia’s Prosecutor General Gevorg
Kostanyan.

A group of Armenians is protesting in front of the European Court, the
European Federation for Justice and Development reports.

The applicant, DoÄ?u Perinçek, is a Turkish national who was born in
1942 and lives in Ankara (Turkey). Being a doctor of laws and the
Chairman of the Turkish Workers’ Party, he participated in various
conferences in Switzerland in May, July and September 2005, during
which he publicly denied that the Ottoman Empire had perpetrated the
crime of genocide against the Armenian people in 1915 and the
following years. He described the idea of an Armenian genocide as an
`international lie’.

The association `Switzerland- Armenia’ filed a criminal complaint
against him on 15 July 2005. On 9 March 2007 the Lausanne Police Court
found Mr Perinçek guilty of racial discrimination within the meaning
of the Swiss Criminal Code, finding that his motives were of a racist
tendency and did not contribute to the historical debate. Mr Perinçek
lodged an appeal that was dismissed by the Criminal Cassation Division
of the Vaud Cantonal Court.

In that court’s view, the Armenian genocide, like the Jewish genocide,
was a proven historical fact, recognised by the Swiss legislature on
the date of the adoption of Article 261bis of the Criminal Code. The
courts did not therefore need to refer to the work of historians in
order to accept its existence. The Cassation Division emphasised that
Mr Perinçek had only denied the characterisation as genocide without
calling into question the existence of the massacres and deportations
of Armenians. The Federal Court dismissed a further appeal by Mr
Perinçek in a judgment of 12 December 2007.

Relying on Article 10 (freedom of expression) of the European
Convention on Human Rights, Mr Perinçek complains that the Swiss
courts breached his freedom of expression. He argues, in particular,
that Article 261bis, paragraph 4, of the Swiss Criminal Code is not
sufficiently foreseeable 3 Under Article 43 of the European Convention
on Human Rights, within three months from the date of a Chamber
judgment, any party to the case may, in exceptional cases, request
that the case be referred to the 17-member Grand Chamber of the Court.
In that event, a panel of five judges considers whether the case
raises a serious question affecting the interpretation or application
of the Convention or its protocols, or a serious issue of general
importance, in which case the Grand Chamber will deliver a final
judgment. If no such question or issue arises, the panel will reject
the request, at which point the judgment becomes final. Otherwise
Chamber judgments become final on the expiry of the three-month period
or earlier if the parties declare that they do not intend to make a
request to refer.5 in its effect, that his conviction was not
justified by the pursuit of a legitimate aim and that the alleged
breach of his freedom of expression was not `necessary in a democratic
society’.

In its Chamber judgment of 17 December 2013 the Court held, by five
votes to two, that there had been a violation of Article 10 of the
Convention. It took the view that the grounds given by the Swiss
authorities to justify Mr Perinçek’s conviction were not all pertinent
and that, taken as a whole, they proved insufficient. The Court
observed that the domestic authorities had not shown, in particular,
that the applicant’s conviction met a `pressing social need’ or that
it was necessary in a democratic society for the protection of the
honour and feelings of the descendants of the victims of the
atrocities which dated back to 1915 and the following years.

The Court therefore found that the domestic authorities had
overstepped the margin of appreciation afforded to them in the present
case, which had arisen in the context of a debate of undeniable public
interest.

On 2 June the case was referred to the Grand Chamber at the request of
the Swiss Government.

Police Keep Teenage Witness in Custody for 2 Days Before Murder Case Hearing

01.27.2015 13:50 epress.am

The witnesses in the case of Vanadzor resident Karen Kungortsev, who
was charged with murdering 15-year old Davit Hovakimyan, are
continuing to give their testimonies in court. During the
interrogation process in the preliminary investigation, the rights of
a few minors were violated, especially the right to give testimony
with the presence of a lawyer or parent.

A minor, R.S., who gave testimony in court yesterday, was kept at the
police station for 2 days. According to Kungortsev’s lawyer, Helsinki
Association lawyer Arayik Papikyan, they “worked on him” while he was
in the police precinct. During his testimony, R.S. slightly changed
his original testimony, stating that he had been at the site of the
incident and had seen Kungortsev there. The latter, however, denies
the claim. According to the lawyer, there are other witnesses that
claim that R.S. was not present in the location during the fight. The
other two witnesses who gave testimonies against Kungortsev, went to
the court yesterday and said that the investigator wrote their
testimonies for them. When they were shown the testimonies, the
witnesses said that they were wrong and did not remember well;
confirming that the testimony was written in their handwriting. They
also claimed that, they were not present at place of the incident and
were informed of it by friends.

Recall, that in one of the previous hearings Gevorg Avagyan, a
witness, said that he was pushed by the police to testify against
Kungortsev. According to Avagyan, at the police station they showed
him a photo of Karen Kungortsev and stated that he has to testify
against him. “They said we’ll show you four photos, this person’s
photo will be in it as well and you’ll point him out,” explained
Gevorg Avagyan. One other witness took back his testimony, saying that
he had made up everything.

Recall, Karen Kungortsev does not admit guilt, and human rights
defenders and his attorney indicate violations recorded during the
preliminary investigations.

While behind bars, the accused has resorted to self harm, as well as
beginning a hunger strike. His mother said that her son was beaten by
police while under police custody and forced to confess.

The charges against Kungortsev were changed from murder to attempted
murder last August. At the same time, the investigation accused and
detained Vanadzor Medical Center company doctor Vladimir Ghukasyan for
unfair treatment and improper implementation of professional duties.

Hurriyet Daily News, Turkey
Jan 26 2015

Turkey’s Worker’s Party chair says he is confident of ECHR ruling on
1915 incidents claims

ISTANBUL ` DoÄ?an News Agency

Turkey’s Workers’ Party (Ä°P) Chairman DoÄ?u Perinçek, who is being
tried at the European Court of Human Rights’ (ECHR) Grand Chamber for
publicly denying that the Ottoman Empire committed genocide against
Ottoman Armenians in 1915, has said he is confident that the ruling
will be in his favor.

Speaking at Istanbul’s Sabiha Gökçen Airport en route to Strasbourg
for the court hearing, Perinçek said it was “difficult to make just
decisions where prejudices prevail,” but added that he still awaited a
positive result.

`The second chamber of the ECHR made a bold decision on Dec. 17, 2013.
Now we are waiting for the same from the Grand Chamber. We are
confident because we are right,’ he added.

A national court verdict in Switzerland in 2007 resulted in the case
being brought to the ECHR. Perinçek was found guilty by a Swiss court
on March 9, 2007 after his participation in a number of conferences in
Switzerland in 2005, during which he publicly denied that the Ottoman
Empire had committed the crime of genocide against Ottoman Armenians.
Denying that the killings amounted to genocide is a criminal offense
in Switzerland.

According to Armenians, up to 1.5 million Ottoman Armenians were
killed starting from 1915 in a systematic campaign. Turkey denies that
the deaths amounted to genocide, saying the toll during the mass
deportation of Ottoman Armenians has been inflated and that those
killed in 1915 and 1916 were victims of general unrest during World
War I.

Perinçek had complained to the ECHR that Swiss courts had breached his
right to freedom of expression. The ECHR ruled on Dec. 17, 2013 that
his statements in Switzerland fell within the limits of freedom of
expression.

The ECHR ruling stated that `free exercise of the right to openly
discuss questions of a sensitive and controversial nature is one of
the fundamental aspects of freedom of expression and distinguishes a
tolerant and pluralistic democratic society from a totalitarian or
dictatorial regime.’

Switzerland objected to the judgment, after which the case was taken
to the ECHR’s Grand Chamber for the final verdict. The Grand Chamber
approved the inclusion of the state of Armenia as a third party
litigant in the case in September.

The case came to the world’s attention with news that Amal Clooney,
the prominent British-Lebanese lawyer and wife of Hollywood celebrity
George Clooney, would be one of the attorneys representing Armenia in
the case.

January/27/2015

Vestnik Kavkaza, Russia
Jan 27 2015

Armenia submits claims of hundred years’ prescription to Turkey

27 January 2015 – 12:21am

Recently, the Turkish newspaper Habertürk reported that Armenia and
the Armenian lobby are preparing a claim to land in Turkey, where
Istanbul Ataturk International Airport and the Cankaya Palace in
Ankara are located.

Armenia and the Armenian lobby in connection with the centenary of the
so-called “Armenian genocide” filed a lawsuit against Turkey for the
return of lands, which, according to them, were taken from some
Armenians during the events of 1915.

In addition, a resident of the United States, writer of Armenian
origin Haroot Sassouniyan, said that in the very near future Armenia
and the Armenian lobby intend to take serious steps to ensure that
this claim was considered by the court.

On January 3 of this year the writer of Armenian origin Zuart Sutsiyan
residing in the United States, raised the issue that land in the
Turkish town of Diyarbakir, where the airport is located, belonged to
his grandfather. Sutsiyan appealed to a court of Turkey and presented
documents that alleged the land on which the airport is located
belonged to his grandfather. The court is now exploring the
authenticity of submitted documents.

With the upcoming 100th anniversary of the so-called “Armenian
genocide”, commemorated on April 24, more claims and accusations are
being heard against Turkey. Territorial and financial claims against
Turkey have become a kind of leitmotif of Armenian public opinion both
in Armenia and in the diaspora, mainly in the western one.

The correspondent of the Vestnik Kavkaza asked Turkish historians and
political scientists, whether the Armenian claims are justified and
have a legal basis, and why exactly this time Armenia risked making
such dangerous political manoevres for the whole region?

Historian and author of “The Armenian Question in 120 Documents from
Russian State Archives” Mehmet Perindzhek noticed that after the
deportation in 1915 part of the property that the Armenians left
passed into public ownership or is used by individuals. He pointed out
that even before the end of the First World War, the Ottoman
government by order of the allied states returned property to Armenian
returnees or their heirs. “Return of property was also implied by the
Lausanne Peace Treaty for all those who returned, without any mention
of the Armenian population in the treaty itself,” the historian
claimed.

Perindzhek noted that under this treaty many people received their
lands, but some claims, because of the great period of time passed,
were not satisfied. “As a result, today it is impossible to return the
property to the heirs of deported Armenians,” the historian said.

Another Turkish political analyst, Cenk Bashlamyshly, said that in
Turkey property owned by Armenians who fled the country in 1915 can
actually be returned.

“Certainly, if there are unfair moments, they should be considered,
and the property returned to the heirs. But the main question is how
it will be proved that it actually belongs to them?” wondered the
analyst, adding that lawyers and jurists should express their opinion.
Despite this fact, Bashlamyshly is sure that the requirements of the
Armenian side are taken from the world of “fiction”, because it is
impossible to believe their appropriateness.

Political analyst also noted that the campaign for establishing claims
on property and territories in Turkey was made by Armenians on the eve
of the 100th anniversary of the events of 1915 and was expected, and
the closer April 24 approaches, the more the accusations against
Turkey will be strengthened.

“The most interesting thing is why these claims are heard only now, on
the eve of the anniversary of those events? Of course, we express our
condolences to those who lost loved ones. But events show that some
representatives of the Armenian diaspora are looking at this issue as
a matter of personal gain,” the analyst concluded.

Ekklesia, UK
Jan 27 2015

‘Keep the memory alive’: Holocaust Memorial Day 2015

by Simon Barrow on 27 January 2015 – 7:45am

Events are taking place around the British and Irish isles to mark
Holocaust Memorial Day on Tuesday 27 January 2015. The theme for this
year is ‘Keep the memory alive’.

Seventy commemorative candles designed by Anish Kapoor are being lit
in every part of the country, to represent the 70 years since the
liberation of Auschwitz-Birkenau concentration camp.

Earlier this week, Channel 4 television showed a remarkable
documentary entitled ‘Night Will Fall’ about the story of those who
filmed the terrible scenes in the Nazi death camps for a movie by
Sidney Bernstein (with assistance from Alfred Hitchcock) which was not
completed or shown immediately after the war, due to the sensitivity
of the material.

It contains some of the most graphic and horrific documentary evidence
of the crimes committed, and is a difficult to watch as it is
important. It also features filmmaker Branko Lustin, a producer who
filmed in Auschwitz and Bergen-Belsen, and who gave his account of
what it was like to film inside the camps. “I had peered into hell…
it is hard to describe,” he said.

‘Night Will Fall’, which lasts 80 minutes, has been screened in over
15 countries in the run up to Holocaust Memorial Day, and will be
available online for another 27 days, as well as on catch-up TV
provider services.

Meanwhile, the HMD website contains a good overview article on ‘The
Holocaust and the Genocides’ (plural) which sets out the horror that
afflicted many millions under the Nazis, and other atrocities,
including the Armenian Genocide, which is still not officially
recognised by Turkey, Israel and others.

In fact the term ‘genocide’ was first used in 1933, in a paper
presented to the League of Nations by the Polish lawyer, Raphael
Lemkin. He devised the concept in response to the atrocities
perpetrated against the Armenian population of the Ottoman Empire
between 1915 and 1923.

On 11 December 1946 the General Assembly of the United Nations
resolved that genocide was a crime under international law. This was
approved and ratified as a Convention on the Prevention and Punishment
of the Crime of Genocide on 9 December 1948.

The Convention defines genocide as “any of the following acts
committed with intent to destroy, in whole or in part, a national,
ethnical, racial or religious group, as such:
– killing members of the group
– causing serious bodily or mental harm to members of the group
– deliberately inflicting on the group conditions of life calculated
to bring about its physical destruction in whole or in part
– imposing measures intended to prevent births within the group
– forcibly transferring children of the group to another group”.

Gregory H Stanton, President of Genocide Watch, has developed a
typology of the Eight Stages of genocide which explains the different
components that lead to genocidal outcomes.

References and resources:

* ‘Night Will Fall’ (C4):

(Deemed unsuitable for younger viewers)

* Viewers stunned by ‘harrowing and shocking’ Channel 4 documentary
(Metro, with a quote from me):

* Holocaust Memorial Day site:

* The Eight Stages of Genocide:

* More on HMD from Ekklesia:

* ‘From 1915 to 2015: the challenge of the Armenian Genocide
centenary’, by Dr Harry Hagopian, Ekklesia:

(c) Simon Barrow is co-director of Ekklesia.

Reuters
Jan 27 2015

OSCE urges Armenia, Azerbaijan to stop clashes

By Margarita Antidze
TBILISI Tue Jan 27, 2015 10:44pm IST

Jan 27 (Reuters) – Europe’s main security and rights watchdog urged
Armenia and Azerbaijan on Tuesday to stop renewed fighting along their
border and around the breakaway Nagorno-Karabakh region.

Violence that has intensified since the start of this year underlines
the risk of broader conflict in the South Caucasus, a region
crisscrossed by oil and gas pipelines.

Armenia-backed forces seized Nagorno-Karabakh and seven surrounding
Azeri districts in the early 1990s. Repeated efforts to secure a
lasting end to hostilities have failed despite mediation led by
France, Russia and the United States.

The fresh skirmishes affect the border between the two former Soviet
republics and around Nagorno-Karabakh, a mountainous region within
Azerbaijan that is controlled by its majority ethnic Armenian
population.

Sporadic clashes between the two countries have thwarted international
efforts to end a conflict that broke out over Nagorno-Karabakh in the
final years of the Soviet Union and killed about 30,000 people.

“I would like to urge the sides to ensure a full ceasefire and
cessation of hostilities,” Ivica Dacic, the Serbian foreign minister
and currently the rotating chairman of the Organization for Security
and Cooperation in Europe, said in a statement.

“I deplore the upsurge in acts of violence resulting in loss of lives,
and I call on the sides to demonstrate responsibility and avoid steps
that would lead to further escalation.”

Armenia and Azerbaijan gave conflicting death tolls and disputed who
was to blame for the recent spike in violence.

The Azeri Defence Ministry said three of its own and 17 Armenian
soldiers had been killed. Nagorno-Karabakh separatists put the death
toll at 10 Armenian and 26 Azeri soldiers.

Oil-producing Azerbaijan, host to global majors including BP , Chevron
and ExxonMobil, frequently threatens to take the mountain region back
by force, and is spending heavily on its armed forces.

Armenia, an ally of Russia, says it would not stand by if
Nagorno-Karabakh were attacked. (Additional reporting by Hasmik
Lazarian in Yerevan and Nailia Bagirova in Baku, Writing by Margarita
Antidze; Editing by Mark Heinrich)

IHS Global Insight
January 26, 2015

Central Bank of Armenia raises interest rates in extra meeting in bid
to curtail inflation expectations

by Venla Sipila

The monetary policy committee of the Central Bank of Armenia CBA) on
22 January 2015 called an unscheduled policy meeting, in which it
decided to increase its key refinancing rate by 100 basis points, from
8.5% to 9.5%. The previous rate revision had been an increase from
6.75% to 8.5% in December. The deposit rate was also increased from 7%
to 8%, whereas the Lombard repurchasing rate was lowered from 20% to
17%. These additional rate moves follow the policy direction taken in
December (seeArmenia: 29 December 2014:Central Bank of Armenia raises
interest rate as rapid dram depreciation lifts inflation
expectations). The next scheduled meeting of the monetary policy
committee will take place on 10 February. According to ARKA News, this
will be followed by publication of a detailed monetary policy
programme for the first quarter of 2015. The latest inflation results
from the Armenian National Statistical Service had shown that consumer
prices in December increased by 4.6% year on year (y/y), following the
November gain of 2.6% y/y. Prices jumped by 3.0% from November. The
average consumer price inflation rate for 2014 measured 3.0%,
following 5.8% in 2013.

Significance:While inflation at present fits within the CBA’s target
range, which is determined 2.5 percentage points on either side of the
central target of 4%, inflation expectations in the country are
elevated (seeArmenia: 14 January 2015:Armenian inflation accelerates
at end-2014, trend is likely to continue). This is mostly due to the
recent depreciation of the dram: over 2014, the AMD/USD exchange rate
weakened by 17%, while it slid by nearly 10% during December alone,
even as the central bank engaged in currency market interventions.
Weakening had continued in the first days of January, whereas
cumulative depreciation by 21 January since the turn of the year was
relatively modest, at 0.3%.The central bank hopes that the latest
interest rate moves will help in suppressing inflation expectations
and keeping inflation in target. The further rate rise is somewhat
surprising in its urgency, but not regarding the general policy
direction. Indeed, we believe that Armenian inflation is likely to
continue accelerating in at least in the near term, while it is not
unconceivable that inflation for 2015 as a whole will exceed the
target. Even as the low international oil prices and the overall
weakness of the economy have an opposite impact, we believe that the
depreciation of the dram will be the decisive factor determining near
term inflation developments. Given Armenia’s dependence on Russia for
remittances and export markets, combined with the very weak outlook or
the Russian economy, weakening pressures on the dram are unlikely to
disappear yet.