Central Bank Chairman Reassures Public amid Tumbling Dram

Armenian Central Bank Chairman Artur Javadian (Photo: Photolur)


YEREVAN—The Chairman of Armenia’s Central Bank Arthur Javadian presented an analysis of the recent rapid devaluation of Armenia’s currency, the dram, during a press conference on Wednesday in Yerevan, and explained the Central Bank’s plan of actions to regulate the situation.

Javadian’s message to a concerned public was optimistic, despite the fact that the dram has depreciated by more than 25 percent in the last two months, evidently due to the Russian ruble’s continuing free fall.

Javadian assured the press that “currently, the dollar is overvalued, while the Armenian dram is too devalued,” chalking the discrepancies up to panic and speculation by investors.

The Central Bank Chairman said the real price of the dram will become apparent when the causes of the dollar’s overvaluation are eliminated.

Javadian said that there is no problem with foreign currency in the banking system and, if necessary, the Central Bank will be able to provide liquidity in the required amount. He added that the Central Bank is keeping the situation under control and has “all the opportunities to restrain inflation.”

Javadian said that after Dec. 26, the Central Bank will exit the currency market, letting the dram rate float freely in the market. Nevertheless, he said, the Central Bank will return to the stock exchange and will continue its transactions within NASDAQ OMX Armenia.

The Prime Minister of Armenia Hovik Abrahamian also issued a statement on the situation in the financial market.

“The current developments in the financial market are actually conditioned by the global and regional developments, which are not free from obviously speculative elements,” Abrahamian said in his statement.

“The Government of Armenia remains loyal to the adopted policy of a floating exchange rate, which is necessary to keep the economy safe from long-term instability,” he added.

The Prime Minister said that the government supports the Central Bank and its efforts to mitigate the effects of the troubled exchange rate market.

He assured in his statement that people with savings in Armenian banks should be confident in the government’s deposit insurance system.

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6 Comments

  1. Norin said:

    This is normal due to all the regional conflict caused by the West in the Ukraine and the ME. Now they are pressuring our strategic allies the Russians by attacking the Ruble, except they forgot that Russia is not a banana republic like Mubarak and Kadafis reigns were, it’s an emerging superpower with a nuclear arsenal. Unfortunately the Dram will have to weather the storm until the mess the West created can be cleaned up again.

    • Hratch said:

      Always like the veiled reference (threat) of the nuclear arsenal. Those weapons are completely useless in today’s world. It is only a deterrent for others not to use them on you. Using them is equivalent to suicide. On the other hand, this third world totalitarian thugocracy will continue to wither away until a more progressive government takes shape. A new government that treats its neighbors (i.e. Armenia) with respect and the pursuit of mutual interests instead of today’s master-slave relationship.

  2. Hratch said:

    The sick man of Eurasia is on the way down. After the downing of Malaysia Airlines Flight MH17, supporting the genocidal regime in Syria, the land grab of the Crimea, the creation of an artificial strife in eastern Ukraine, the formation of rebels in Moldova, and coercing Armenia to join the EEU, Mother Russia thought she were off the hook once the headlines faded. But the west is a smarter animal. Instead of cornering and antagonize the bear, they let it walk away so to speak. Now the time has come to pay the piper. Sanctions combined with lower oil prices will bring the bear to its knees. No need for external force. The disease within will destroy the beast. We, on the other hand, will have to continue to deal with the misery and fallout from our misguided association with the sick man of Eurasia.

    • Norin said:

      The only sick men are those Armenians in the Diaspora that parked themselves in the anal sphincter of Europe chanting “paykar paykar minchev verch” to no avail. Geostrategic ties with Russia and the EEU are the future. You are like the typical sick man Armenian that always wants to practice the adage of “vortex hatz, eintex katz”. Russia is a regional power and soon to be superpower once again, manipulation of oil prices to hurt the bear are a last second desperate salvo by Washington and Brussels to apply pressure in hopes of stopping Russian emergence on the global stage.

      But as they say “the Russian’s back is wide”, they will pull through this, Armenia stuck by its principles as a regional ally by not running to the supposed greener pastures as soon as trouble was brewing, that’s is the meaning of a true alliance. While you can whine about Russian weapon sales to other nations, in the long run Russians will remember who did why when things were tight.

      • Hratch said:

        When you’re whole economy is based on oil and weapons sales, that will never elevate you to a super power. The only reason why they were considered a superpower in the past was because of their brutal communist system of domination and slavery. Today, they’re trying to recreate the glory by once again enslaving their neighbors. Yes we are the sick man if we continue to feed the bear’s insatiable appetite for power and domination. Be assured, the rapprochement with Cuba and recent developments are no accident. Without $110 oil, there is not much any of these tyrants can do anymore. Venezuela, Iran and Russia have all built their power on sand and now the sand has shifted. Putin talks about how the Russians can withstand any hardship, but the truth is that in today’s Russia the middle class will no longer tolerate such suffering. The days of serfdom are over for the Russians. They have tasted freedom and, unlike us, will never go back to business as usual.

        The issue is not Russia per se, it’s their approach and policy of totalitarian rule bent on dominating their neighbors. Once a more free and democratic government takes hold, everyone, including Armenia will be much better off. We expect nothing short of respect and excellent relations with Russia that pursues mutual interests instead of the master-slave relationship we have now. Otherwise, if left unchecked, we are headed back to USSR days with a KBG agent at the helm.

        God bless Armenia and protect it from all Russophiles both foreign and domestic !

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