March 4, 2009 - 14:40 AMTPanARMENIAN.Net
- Armenian National congress commented upon the situation in Armenia after national currency
The dram-to-dollar exchange rate has gone up yesterday to AMD 360/$1 against 305 -310 index and
Dram/euro exchange rate reached AMD 440 (against 387).
The upsurge followed CB President Arthur Javadian's statement on cessation of control over the foreign currency market and return to floating rate policy.
"The Armenian authorities decision confirmed the forecast of ANK and its economic commission, specifically the first president Levon Ter-Petrosyan, about the fact that the authorities won't be able to keep up fixed exchange rate policy and will have to make decisions, which would ensue in national currency downfall," ANK reported.
"The CBA decision is a result of authorities' ignoring the intensity of world crisis, short sighted and criminal policy of serving the interests of importer oligarchs."
ANK announcements kept warning about the necessity to apply floating rate policy and stop squandering external supplies. The thick skin policy of authorities is not a result of inability to acknowledge the reality but a deliberate act of plundering.
Only within recent 4-5 months more than USD 800 million, which fully accumulated in the pockets of a few oligarchs and officials, were brought to the country's internal market from outer reserves under the guise of artificial maintenance of exchange rate. If the floating rate policy had been applied in November, the consequences of world financial crises including price growth, high inflation index, , low taxation level (40%-50%) were likely to be mitigated . All of this can result in social disasters, SME business bankruptcies, deterioration of commercial banks financial situation, continued enrichment of importer oligarchs and high ranked officials. As a result, the mistrust of the society and businessmen to the authorities' policy keeps growing, stirring up a panic.
ANK suggests returning to floating rate policy, preclude CBA administrative interference, stop squandering external assets and restore the optimal level. Its also necessary to provide the transparency of essential goods price formation to prevent creation of super profits. According to ANK, gas and electricity prices should be lowered, 2009 budget reviewed, and governmental expenditures reduced. "To overcome the crisis we have to suspend customs administration reforms, specifically reduce taxation basis for SME business, cease the obligatory use of cash terminals, set aside the demands to taxi drivers."
To prevent the outflow of bank deposits we have to raise deposit return guarantees to AMD 5 million (against the fixed AMD 2 million), inform the population about the measures implemented and provide truthful data.
ANK added that the program could only be implemented by legal authority enjoying the trust of population.