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ECONOMIST: INFLATION IN ARMENIA INCONSISTENT WITH CURRENCY DEPRECIATION
Economy | 25.12.14 | 15:47
By Sara Khojoyan
ArmeniaNow reporter
The Armenian government's claims that the December inflation was
conditioned by the dram's devaluation and is within the projected
limits cannot be true, economist Bagrat Asatryan said on Thursday.
The former Central Bank governor believes there is no direct
correlation between the devaluation of the national currency and
inflation, although Armenia is mostly an importing country and
naturally it is not possible to avoid inflation.
"There is dependency, but it is nothing, if we count based on current
developments, then inflation must have been only 0.3-0.5 percent.
There is no direct correlation; simply in Armenia the pricing policy
is not efficient. The gas price has not increased yet, and it is what
affects price formation most," Asatryan told reporters today.
Emphasizing that mistrust toward the government is the main cause
of the dram's drastic devaluation and the panic and the main cause
for the economic situation that followed, the economist said that it
was possible to prevent the situation if the government implemented
a correct policy.
"They say that exchange offices did speculations, but they are made
exactly for that. They must get out of such a level of debate and work
ethic and make decisions regarding the financial system, they must
make problems public and think about their solutions," Asatryan said.
The dram depreciated drastically on December 17, which many observers
evaluated as "a day of panic currency buying", when the dram exchange
rate hit its historic lows at above 600 AMD, after which it quickly
rebounded settling at 455-465 AMD per dollar.
"Approaches and decisions toward stabilization of the financial
system are important, and the Central Bank has that potential,"
Asatryan said. "The policy implemented during the dram devaluation
was a result of political pressure."
"For 20 years we've been spending money to have an independent Central
Bank. But what do we have now?" he said, adding that risks for the
banking system have increased today.
http://armenianow.com/economy/59630/armenia_currency_market_central_bank_bagrat_asatry an
Economy | 25.12.14 | 15:47
By Sara Khojoyan
ArmeniaNow reporter
The Armenian government's claims that the December inflation was
conditioned by the dram's devaluation and is within the projected
limits cannot be true, economist Bagrat Asatryan said on Thursday.
The former Central Bank governor believes there is no direct
correlation between the devaluation of the national currency and
inflation, although Armenia is mostly an importing country and
naturally it is not possible to avoid inflation.
"There is dependency, but it is nothing, if we count based on current
developments, then inflation must have been only 0.3-0.5 percent.
There is no direct correlation; simply in Armenia the pricing policy
is not efficient. The gas price has not increased yet, and it is what
affects price formation most," Asatryan told reporters today.
Emphasizing that mistrust toward the government is the main cause
of the dram's drastic devaluation and the panic and the main cause
for the economic situation that followed, the economist said that it
was possible to prevent the situation if the government implemented
a correct policy.
"They say that exchange offices did speculations, but they are made
exactly for that. They must get out of such a level of debate and work
ethic and make decisions regarding the financial system, they must
make problems public and think about their solutions," Asatryan said.
The dram depreciated drastically on December 17, which many observers
evaluated as "a day of panic currency buying", when the dram exchange
rate hit its historic lows at above 600 AMD, after which it quickly
rebounded settling at 455-465 AMD per dollar.
"Approaches and decisions toward stabilization of the financial
system are important, and the Central Bank has that potential,"
Asatryan said. "The policy implemented during the dram devaluation
was a result of political pressure."
"For 20 years we've been spending money to have an independent Central
Bank. But what do we have now?" he said, adding that risks for the
banking system have increased today.
http://armenianow.com/economy/59630/armenia_currency_market_central_bank_bagrat_asatry an