Armenian Dram’s Tenth Anniversary

YEREVAN (RFE/RL)–Armenia marked on Monday the tenth anniversary of the introduction of the dram–its national currency once widely mistrusted by the population but now seen as one of the most stable in the former Soviet Union.

An official ceremony–organized by the Armenian Central Bank and attended by President Robert Kocharian–was held at the National Art Gallery in Yerevan. Officials said the dram’s strength and domestic convertibility proves the wisdom of tight monetary policies that are credited with the country’s macroeconomic stability that has continued since the mid-1990s.

"We can now say that our national currency has been a success," said Central Bank chairman Tigran Sarkisian. "This is evidenced by the macroeconomic situation in Armenia."

The dram was introduced to replace the rapidly depreciating ruble of the already defunct Soviet Union in November 1993–at the height of Armenia’s post-Soviet economic collapse and the war in Mountainous Karabagh. Hyperinflation and a lack of hard currency in the Central Bank coffers meant that the Armenian currency’s value plummeted from 17 to 400 drams per one US dollar within months. One dollar is now worth 570 drams.

Armenia’s economic growth has enabled the Central Bank to increase its hard currency reserves to nearly $500 million from just $500,000 Armenia had back in 1993. The IMF will further boost those reserves with yet another $14 million loan which it is due to release this week.

Many business transactions in Armenia–nevertheless–continue to be carried out in dollars–and most Armenia’s still convert their savings into the US currency.

Sarkisian admitted this reality–blaming it the continuing huge scale of the shadow economy–widespread cash transactions and substantial dollar remittances sent home by Armenia’s working abroad.

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