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ANOTHER PRICE INCREASE IN ARMENIA
Susanna Petrosyan
Vestnik Kavkaza
June 13 2012
Russia
The dramatic increase of dollar at the local currency market became one
of the most discussed themes in recent weeks in Armenia. During last
few days dollar went up by 1.3 points (0.56%) and costs 411.03 drams.
The course began to change in the beginning of 2012, by April dollar
reached 386.15-392.16 drams, i.e. by 1.5%. In May dram devalued by
3.5%. The dynamics caused panic at the currency market and among
the population.
The Armenia Central Bank Council registered that deepening of
uncertainty in decisions on debt problems in the EU caused dramatic
going-up of dollar toward currencies of basic partners of Armenia -
the European Union and Russia. It reflected on the currency market
of Armenia negatively.
Many experts believe that swing of currencies is normal. There are
two reasons for this: increase of demand on dollars at the internal
market, and oil price fluctuations.
Moreover, volumes of private transfers influence seriously the exchange
course of dram. The role of private transfers is great in the Armenian
economy. It concerns millions dollars. According to the former premier
Grant Bagratyan, the dynamics of transfers changes from month to month,
depending on inflows and outflows of labor migrants.
However, some experts believe that dollar going-up has positive sides
too. Those citizens who have dollar savings are in benefit.
Furthermore, devaluation of the national currency causes export
increase. Stabilization of dram can follow tourism season in Armenia,
when tourists will exchange their currency into drams.
Nevertheless, considering the fact that Armenia is mainly an importer,
dollar course increase will lead to price increase: "Devaluation of
dram will cause damage to the import sector first of all, because
imported products' prices will increase," the chairman of the
Republican Employers Union of Armenia, Gagik Makaryan, thinks.
Vaagan Khachatryan, an expert on economics, notes that the state
budget of Armenia presupposes 378.96 drams for one dollar, while
today dollar costs 410-413 drams: "Serious problems will appear
in local industry. In next 15_20 days prices will go up and local
producers will have no resources to cover production expenses. We
should impulse the Armenian economy artificially, but no steps are
being made at the moment. The Armenian economy needs investment. The
only way out is to establish beneficial conditions for investments,
but we have to big taxes."
Specialists are skeptical about return of dollar course at the previous
level: "Experience shows that after going-up of dollar, there is no
significant devaluation of it," the economic expert Aik Mnatsakanyan
believes. Many experts predict further dollar course increase.
Susanna Petrosyan
Vestnik Kavkaza
June 13 2012
Russia
The dramatic increase of dollar at the local currency market became one
of the most discussed themes in recent weeks in Armenia. During last
few days dollar went up by 1.3 points (0.56%) and costs 411.03 drams.
The course began to change in the beginning of 2012, by April dollar
reached 386.15-392.16 drams, i.e. by 1.5%. In May dram devalued by
3.5%. The dynamics caused panic at the currency market and among
the population.
The Armenia Central Bank Council registered that deepening of
uncertainty in decisions on debt problems in the EU caused dramatic
going-up of dollar toward currencies of basic partners of Armenia -
the European Union and Russia. It reflected on the currency market
of Armenia negatively.
Many experts believe that swing of currencies is normal. There are
two reasons for this: increase of demand on dollars at the internal
market, and oil price fluctuations.
Moreover, volumes of private transfers influence seriously the exchange
course of dram. The role of private transfers is great in the Armenian
economy. It concerns millions dollars. According to the former premier
Grant Bagratyan, the dynamics of transfers changes from month to month,
depending on inflows and outflows of labor migrants.
However, some experts believe that dollar going-up has positive sides
too. Those citizens who have dollar savings are in benefit.
Furthermore, devaluation of the national currency causes export
increase. Stabilization of dram can follow tourism season in Armenia,
when tourists will exchange their currency into drams.
Nevertheless, considering the fact that Armenia is mainly an importer,
dollar course increase will lead to price increase: "Devaluation of
dram will cause damage to the import sector first of all, because
imported products' prices will increase," the chairman of the
Republican Employers Union of Armenia, Gagik Makaryan, thinks.
Vaagan Khachatryan, an expert on economics, notes that the state
budget of Armenia presupposes 378.96 drams for one dollar, while
today dollar costs 410-413 drams: "Serious problems will appear
in local industry. In next 15_20 days prices will go up and local
producers will have no resources to cover production expenses. We
should impulse the Armenian economy artificially, but no steps are
being made at the moment. The Armenian economy needs investment. The
only way out is to establish beneficial conditions for investments,
but we have to big taxes."
Specialists are skeptical about return of dollar course at the previous
level: "Experience shows that after going-up of dollar, there is no
significant devaluation of it," the economic expert Aik Mnatsakanyan
believes. Many experts predict further dollar course increase.