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Dram-Dollar Relations: Union head predicts rate of 520 AMD-$1 by 2014
Economy | 15.06.12 | 13:43
NAZIK ARMENAKYAN
ArmeniaNow
By Gohar Abrahamyan
ArmeniaNow reporter
or containing slander or offensive language will be deleted. You have
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now for free.
The steady and dynamic increase of US dollar value and depreciation of
the Armenian dram observed over the past few weeks remains news in
Armenia, and has one union chief predicting the highest dollar rate in
more than a decade.
According to Central Bank of Armenia (CBA) figures, during the past
month the dollar-drum rate in Armenia went from 395 drams per dollar
to 415 drams, and even 416 at some exchange points.
Some economists condition the dollar appreciation against the dram by
international market developments, namely dollar-euro fluctuations,
drop of oil tariffs, etc. Others assure that `the culprit' is the May
6 parliamentary election, during which `huge amounts of election
bribes were given out and as a result a great amount of cash has
entered circulation', causing the value of the dram to plummet.
While the majority of economists are reluctant to make predictions,
Gagik Makaryan, head of the Republican Union of Employers, said during
his Thursday meeting with the press, that `the US dollar will keep
getting stronger, as in the nearest future Armenia will have a dollar
deficit'.
`The total value of import for last year made $4.1 billion, to which
$1 billion is added for paying back the foreign debt in the next two
years. We need an extra $500 million per year. We can't get that 500
million by increasing export and remittances as no such drastic
increase is possible,' says Makaryan, adding that if that half a
billion is divided by general demand, the dollar demand will increase
by 10-11 percent.
`If dollar demand goes up and the volume isn't increased, then the
price goes up. This means that in 2013 the dollar rate will go up to
460, and will reach 520 drams in 2014,' predicts Makaryan.
He says that the appreciation of US dollar against the Armenian dram
is favorable for those exporters who get their financing from abroad.
On the other hand, when the dollar keeps getting stronger, the prices
for imported commodities grow respectively.
Hakob Bagdasaryan, director of Akcern, a major real estate agency in
Armenia, says the dram depreciation will have its impact on the real
estate market as well. Meanwhile, he says, `the situation is steadily
heavy in Armenia' in this market.
According to him, there is drop of demand for real estate in Armenia,
which nonetheless does not have any tangible impact on the prices, as
the price fluctuations range from 0.5 to 1 percent.
`The situation today is worse in provinces of Armenia than in Yerevan,
because of the number of productions focused in the capital,' says
Baghdasaryan, adding that in Yerevan the prices for one square meter
in a residential building begin from $3,000, and commercial premises
cost $500-8,000 per sq m.
Economy | 15.06.12 | 13:43
NAZIK ARMENAKYAN
ArmeniaNow
By Gohar Abrahamyan
ArmeniaNow reporter
or containing slander or offensive language will be deleted. You have
to be registered to be able leave your comment. Sign in or Register
now for free.
The steady and dynamic increase of US dollar value and depreciation of
the Armenian dram observed over the past few weeks remains news in
Armenia, and has one union chief predicting the highest dollar rate in
more than a decade.
According to Central Bank of Armenia (CBA) figures, during the past
month the dollar-drum rate in Armenia went from 395 drams per dollar
to 415 drams, and even 416 at some exchange points.
Some economists condition the dollar appreciation against the dram by
international market developments, namely dollar-euro fluctuations,
drop of oil tariffs, etc. Others assure that `the culprit' is the May
6 parliamentary election, during which `huge amounts of election
bribes were given out and as a result a great amount of cash has
entered circulation', causing the value of the dram to plummet.
While the majority of economists are reluctant to make predictions,
Gagik Makaryan, head of the Republican Union of Employers, said during
his Thursday meeting with the press, that `the US dollar will keep
getting stronger, as in the nearest future Armenia will have a dollar
deficit'.
`The total value of import for last year made $4.1 billion, to which
$1 billion is added for paying back the foreign debt in the next two
years. We need an extra $500 million per year. We can't get that 500
million by increasing export and remittances as no such drastic
increase is possible,' says Makaryan, adding that if that half a
billion is divided by general demand, the dollar demand will increase
by 10-11 percent.
`If dollar demand goes up and the volume isn't increased, then the
price goes up. This means that in 2013 the dollar rate will go up to
460, and will reach 520 drams in 2014,' predicts Makaryan.
He says that the appreciation of US dollar against the Armenian dram
is favorable for those exporters who get their financing from abroad.
On the other hand, when the dollar keeps getting stronger, the prices
for imported commodities grow respectively.
Hakob Bagdasaryan, director of Akcern, a major real estate agency in
Armenia, says the dram depreciation will have its impact on the real
estate market as well. Meanwhile, he says, `the situation is steadily
heavy in Armenia' in this market.
According to him, there is drop of demand for real estate in Armenia,
which nonetheless does not have any tangible impact on the prices, as
the price fluctuations range from 0.5 to 1 percent.
`The situation today is worse in provinces of Armenia than in Yerevan,
because of the number of productions focused in the capital,' says
Baghdasaryan, adding that in Yerevan the prices for one square meter
in a residential building begin from $3,000, and commercial premises
cost $500-8,000 per sq m.