Central Bank Remains Confident As Dram Falls 4%

YEREVAN (RFE/RL)–The Armenian Central Bank said it plans no monetary intervention to shore up national currency–since the dram–which fell by around four percent against the US dollar Wednesday–provoked jitters about possible effects on Armenia of the ongoing financial crisis in Russia.

Nerses Yeritsian–a member of the Bank’s board–told reporters that with good macroeconomic indicators coupled with improved revenue collection and rising foreign reserves Armenia will avoid the kind of crisis that hit Russia last month.

The statement came as the dollar was trading at 520 drams in Yerevan’s currency exchange shops on Wednesday–up from the previous day’s average of 502.

Yeritsian said the drop has been caused by "petty speculations that will not take a large scale."

He said some currency traders are erroneously nervous about possible negative effects from Russia. "The situation in Armenia is substantially different from that in Russia," he said. "Our economy is now balanced and the Central Bank does not plan to use its reserves to stop the dram’s unfounded fall."

The Armenian economy grew by 6.7 percent in the first half of the year and the growth rate is expected to reach 7 percent by the end of 1998. As of late August consumer price index has fallen 6 percent compared with December 1997. The government has claimed a 50 percent rise in budget revenues in the first half.

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