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RA CB to continue intervention in foreign exchange markets

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  • RA CB to continue intervention in foreign exchange markets

    PanARMENIAN.Net

    RA CB to continue intervention in foreign exchange markets
    12.03.2009 15:39 GMT+04:00

    /PanARMENIAN.Net/ `CBA will periodically intervene in foreign exchange
    rate market, buying up little quantities of US dollars to prevent
    speculative shocks,' the Chairman of Parliamentary Commission for
    Finance, Crediting, Budget and Economy, Member of RA Republican Party
    Gagik Minasyan told a news conference on Mar. 12, commenting on dram
    devaluation and CBA introduction of floating exchange rate
    policy. According to him, the situation in the foreign exchange rate
    market has stabilized.

    `The return to floating exchange rate policy has long been expected,'
    he noted, citing two reasons for that drastic step. `Armenia's banking
    system was ready to service their clients and pay interests for all
    the investments previously made. Besides, inflation rate comprised
    5.2% in 2008, and in 2009 it decreased by 0.7%.' He added that in 2008
    inflation pressure in Armenia was much lower than in other CIS
    countries, where the minimal inflation rate comprised 10%.


    Minasyan stressed that a phased introduction policy would have had a
    number of disadvantages. `Upon termination of the next step, wide
    sections of the population and banking systems would start buying out
    great amounts of foreign currency to secure themselves against
    losses. As a result, CBA would be forced into selling more foreign
    currency offering more possibilities for speculators to increase their
    incomes.'
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