Armenian dram might start floating
By Messenger Staff
Thursday, March 5Armenia is experiencing a deficit of USD as a result of currency interventions by the Armenian central bank, states economic analyst Andronik Tevanian. The USD rate is kept stable in Armenia, 305 dram to 1 USD, but to achieve this the central bank makes daily insertions of USD onto the currency markets. For instance, on February 27 USD 22 million were sold, but consequently there is a deficit of foreign currency in the country. It is practically impossible to buy USD in banks and exchange offices.
Andronik Tevanian thinks that the central bank will be unable to continue with this policy of active intervention as the country’s reserves have decreased by up to USD 1 billion, leaving a risky margin. Therefore the central bank has to be more conscious about continuing in this direction.
If the dram is allowed to float it will be devalued and create a shock for the population, however there is no alternative, thinks Tevanian.