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CURRENCY "BUBBLE"
YEREVAN, MAY 5. ARMINFO. In the retail currency market of Armenia US
dollar started strengthening its positions, which has been immediately
responded by the CB. The latter made an official call to the population
to avoid losses not to obey to panic and false rumors and not to give
their savings. The Armenian CB is taking measures in the market to
maintain the natural level of dram liquidity and at exchange points
to secure legality of transactions.
Within 2004 the exchange rate decreased from 570 to 475, decreasing
to 435 AMD per 1 USD by May 3. Today, sharp fluctuation of the
currency rate was observed in the retail currency market of Armenia,
which reached its top - 490 AMD per 1 USD in daytime and decreased
back to 465 AMD per 1 USD. Currency dealers explain this by a
speculative factor, in particular, big sums were regularly directed
to the market, which shook the exchange rate and "currency speculators
took advantage of it."
Factually, the considerable reduction in the USD exchange rate
within the year has led to changes in the intentions of the
market-participants, in particular, currency speculators are in
question, who earlier sold dollars and now try to buy them. A dealer
of one of the largest banks of Armenia says talking to ARMINFO. He
thinks that the so-called "resold market" because of intensive dram
interventions of the Armenian CB had not less important part in the
situation in the country's currency market. The CB purchased $55.5
mln from Jan 27 to May 3 including $27 mln in April alone. He says
that the CB announcing the change in the mechanism of calculation of
the normative of compulsory reservation on attracted funds from May
27 had an important impact on the fluctuation of the currency rate.
The announcement supposed that reservation on dollar funds must
be made in terms of dollars, EUR - in terms of EUR, AMD - in terms
of AMD and on other currencies - in terms of dollars. Besides, the
lion's share of the fund attracted by the commercial banks were in
dollars and their reservation required purchase of dollars or at
least their preservation.
On the day of debates at the Armenian Parliament around the situation
in the currency market, on May 3 the Armenian CB held a regular
dram intervention intending to purchase $5 mln from banks. However,
the exhausted opportunities of the banks (many of them had short
dollar positions) did not allow the CB to purchase dollars at the
rate close to the market rate (banks offer high rates). As a result,
the CB purchased only $3.1 mln for 444.90 AMD per 1 USD.
The bank's dealer thinks that the sale of dollars by the currency
speculators in large lots led to the fact that the cash at exchange
points was almost sold for 465 AMD per 1 USD, that is why the rate
continued to rise reaching 490 AMD per 1 USD. The CB immediately
responded by a toughened inspection of exchange points. By this step,
the CB made the marker-participants understand that it will not
allow further sharp fluctuation of the exchange rate. As a result,
the rate decreased by 20 AMD to 470 AMD per 1 USD.
Top note, the Armenian CB has set the AMD-USD exchange rate for May 6
at 459.39/1 respectively, increasing it by 15.45 AMD as against May 5.
From: Baghdasarian
YEREVAN, MAY 5. ARMINFO. In the retail currency market of Armenia US
dollar started strengthening its positions, which has been immediately
responded by the CB. The latter made an official call to the population
to avoid losses not to obey to panic and false rumors and not to give
their savings. The Armenian CB is taking measures in the market to
maintain the natural level of dram liquidity and at exchange points
to secure legality of transactions.
Within 2004 the exchange rate decreased from 570 to 475, decreasing
to 435 AMD per 1 USD by May 3. Today, sharp fluctuation of the
currency rate was observed in the retail currency market of Armenia,
which reached its top - 490 AMD per 1 USD in daytime and decreased
back to 465 AMD per 1 USD. Currency dealers explain this by a
speculative factor, in particular, big sums were regularly directed
to the market, which shook the exchange rate and "currency speculators
took advantage of it."
Factually, the considerable reduction in the USD exchange rate
within the year has led to changes in the intentions of the
market-participants, in particular, currency speculators are in
question, who earlier sold dollars and now try to buy them. A dealer
of one of the largest banks of Armenia says talking to ARMINFO. He
thinks that the so-called "resold market" because of intensive dram
interventions of the Armenian CB had not less important part in the
situation in the country's currency market. The CB purchased $55.5
mln from Jan 27 to May 3 including $27 mln in April alone. He says
that the CB announcing the change in the mechanism of calculation of
the normative of compulsory reservation on attracted funds from May
27 had an important impact on the fluctuation of the currency rate.
The announcement supposed that reservation on dollar funds must
be made in terms of dollars, EUR - in terms of EUR, AMD - in terms
of AMD and on other currencies - in terms of dollars. Besides, the
lion's share of the fund attracted by the commercial banks were in
dollars and their reservation required purchase of dollars or at
least their preservation.
On the day of debates at the Armenian Parliament around the situation
in the currency market, on May 3 the Armenian CB held a regular
dram intervention intending to purchase $5 mln from banks. However,
the exhausted opportunities of the banks (many of them had short
dollar positions) did not allow the CB to purchase dollars at the
rate close to the market rate (banks offer high rates). As a result,
the CB purchased only $3.1 mln for 444.90 AMD per 1 USD.
The bank's dealer thinks that the sale of dollars by the currency
speculators in large lots led to the fact that the cash at exchange
points was almost sold for 465 AMD per 1 USD, that is why the rate
continued to rise reaching 490 AMD per 1 USD. The CB immediately
responded by a toughened inspection of exchange points. By this step,
the CB made the marker-participants understand that it will not
allow further sharp fluctuation of the exchange rate. As a result,
the rate decreased by 20 AMD to 470 AMD per 1 USD.
Top note, the Armenian CB has set the AMD-USD exchange rate for May 6
at 459.39/1 respectively, increasing it by 15.45 AMD as against May 5.
From: Baghdasarian