Armenian economy dollarization goes on

PanARMENIAN.Net - On one hand, credits, providing foreign currency inflow, activate economy, allowing for development of local businesses, leading to positive tendencies on the way to overcoming financial crisis. On the other hand, they aggravate the position of RA government and CBA, who wage a struggle against increasing USD monetary aggregates.

Business entities - beware! State Committee for Revenue under the RА government calls on businesses to respect the national currency, to meet requirements of the law and not conduct transactions in foreign currency, saving their own funds. In case of violation of this provisions, a fine of 2 million drams is imposed and in case of repeated violations a fine will reach 4 million drams for a year.

The public relations department of the State Revenue Committee reported that numerous violations of the law by businesses have been recently revealed.

The gradual growth in the dollar rate (and the devaluation of dram) was accidentally broken by Iranian nationals who have decided to celebrate their New Year - Novruz in Armenia and brought the foreign currency to the country. Sharp fluctuations in the national currency of Armenia have been mainly conditioned by the influx of dollars into the country, and the influx of tourists. On March 17 at the foreign exchange market the rate of Armenian dram to U.S. dollar exceeded the "psychological" mark and reached 400.10 dram/dollar, after which the rate of dram gradually devalued. In recent days the situation on the foreign exchange market started to stabilize, and today the rate is 394.62 dram/dollar.

Citizens of Iran will leave, and the dollar will also continue to grow, and according to experts' predictions, the year-end exchange rate could reach 430 dram/dollar.

The situation in the foreign exchange market of Armenia is puzzling: is the dollar exchange rate in Armenia an internal process, administered by the state, unlike the rest of the world, or market mechanisms working?

Much depends on how well the government and the Central Bank are able to respond to the situation on the currency market. Armenian paradox is that the population is dissatisfaction in any case: when the dollar is rising, and when the dollar is falling, and when it is fixed.