Falling Dram Triggers Price Hikes

A statue symbolizing the dram, outside the Central Bank building in Yerevan. (Photo: Photolur)

YEREVAN (Arka)—The Armenian dram’s devaluation has driven commodity prices in Armenia to rise by 15 to 20 percent, Chairwoman of the Armenian National Academy of Consumers Melita Hakobian said Monday at a news conference. She said that prices are set to continue increasing.

Ruben Aytian, Vice President of the National Academy of Consumers, said that prices for grains have surged by up to 40 percent.

Trouble in Armenia’s foreign exchange market began on Nov. 24, when the national currency plunged 16.6 percentage points hitting its record low in the last eight years. The U.S. dollar has continued its appreciation against the dram since then. On Monday, it traded at 471.78 drams.

Earlier, Arthur Javadian, head of the Central Bank of Armenia, said that the national currency’s devaluation will create additional inflation pressure ranging from 1.5 to 2 percent in the fourth quarter of this year and the first quarter of the next year, but later this pressure will subside.

Summarizing the previous year and assessing Armenia’s consumer market, the representatives of the National Academy of Consumers said market developments were positive.

“The quality of the products offered at our market is gradually improving, and this will be noted also at the international level,” Hakobian said. “However, we have certain problems.”

According to the National Statistical Service of Armenia, 2.8 percent inflation was recorded in the country in the period from Jan. to Nov. 2014.

In the government budget for 2014, inflation was projected at 4 percent. The same inflation rate is projected in the 2015 government budget.

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One Comment;

  1. Hratch said:

    The more we’re aligned to the sick man of Eurasia, the faster we’ll go down with the sinking ship. This is the beginning of a long and painful episode in our history. We will be lucky if we ever recover from such a blow. And to think, we entered the EEU even after sanctions were imposed. How desperate and crass we have to be to go in after the fact. What self respecting country would enter into an agreement after it starts rotting?

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