Remittances from Russia Reduced amid Looming Recession

The Central Bank of Armenia building in Yerevan


YEREVAN (Arka)—Money transfers from Russia to Armenia have dwindled amid economic recession in Russia and slow growth in the region, Teresa Daban Sanchez, the International Monetary Fund Resident Representative in Armenia, said on Friday.

According to the Central Bank of Armenia, transfers from Russia to Armenia totaled about $145.7 million in September 2014 after shrinking 7 percent, compared with September 2013, and 9.8 percent, compared with the previous month.

Sanchez told journalists that Russian transfers that are very important to Armenia’s economy significantly dwindled this year because of economic issues across the world and a devaluation of Russia’s national currency.

Sanchez said the fact that the Russian ruble has plummeted gives grounds for concern. Unlike the Russian national currency, the Armenian dram’s exchange rate remains stable despite volatility in Russia’s foreign exchange market, inflation, and low outlooks for economic growth.

The IMF representative said Armenia’s economy is highly dollarized, therefore fluctuations in exchange rates strike hard at the country’s people, but this time the Armenian dram stood firm.

The Central Bank of Armenia says over $185.7 million came to Armenia through banks as individual noncommercial money transfers in Sept. 2014 — a 5 percent year-on-year decline. Transfers from Russia dominated the total inflow with 85.8 percent. That is why the reduction of Russian transfers to Armenia has a significant impact.

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5 Comments

  1. Armenian said:

    Another reason why Armenia should avoid being too close to Russia and start to develop its own economic legs.

  2. edward demian said:

    Nagorno Karabagh has the potential of becoming the Switzerland of the Caucasus. Banking Swiss style is very profitable and environmentally friendly. Surely there are people in Armenia and Artsackh with more vision than evident.

    • Armenian said:

      Armenia isn’t going to realize any of its potential so long as the one power it’s forged an extremely close and dependent relationship with continues to play a dominant role in its everyday dealings.

  3. www.Voskanapat.info said:

    I think it’s this artificial conversion of remittances amounts to dollars that is causing such alarmist headlines. More yellow journalism from the Cuban Twitter operations in Yerevan.

    Russian economy is under attack by Western banksters and ruble has lost to dollar a lot in the past few months. What is the real amount of remittances in rubles? I bet it stayed the same if not increased. You know you can send rubles from Russia to Armenia and convert them straight to drams. Dollars are irrelevant. They are only good for paying taxes if you owe Uncle Sam, the rest of the demand is due to the constant war mongering and oil prices manipulation.

    With BRICS countries shifting away from the funny money, this will not matter soon.

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