YEREVAN, MARCH 4, NOYAN TAPAN. By returning to a floating exchange rate policy on March 3, the Central Bank of Armenia (CBA), on the whole, paid attention to economic growth. In the opinion of the CBA, the floating exchange rate will become a stimulus for economic growth, and Armenia will have an economic growth of several percents in 2009, whereas the IMF has forecast an economic decline, the deputy chairman of the CBA Vache Gabrielian stated at the March 4 press conference. To recap, when the CBA adopted an inflation targeting policy, it was announced that it was done due to the necessity to protect the interests of those who receive their incomes in Armenian drams, that is, who make the majority of the Armenian population. However, according to the CBA, on March 3 the exchange rate was 372.11 drams a dollar, exceeding the exchange rate of the previous day by 66.36 drams, as a result of which consumer prices, in particular, prices of imported foodstuffs and fuel for vehicles have risen by 20-30%. In response to the question: "What will be the price of shifting to a floating exchange rate in terms of forecasting expectations about promotion of exports and investments and creation of jobs?", V. Gabrielian replied that perhaps it would not be correct to connect the problem of protecting the interests of those who receive incomes in drams (the problem in this wording) with inflation targeting. He added that by the law, the CBA has to ensure price stability which presupposes a low and stable level of inflation which must be expressed in drams. The CBA does not calculate a price growth in dollars because the dram is the national currency, and inflation is calculated by the consumer basket in drams. In this sense, inflation targeting has not made any change. "We will continue calculating inflation in drams. In any case, regardless of whether our policy will be conducted by means of monetary aggregates or inflation targeting, it will be aimed at combating the inflation in drams," the CBA official stated. In his words, "naturally when the exchange rate of the dram against the dollar has risen, it is more difficult for those who receive their incomes in drams, but all our calculations of inflation are related to the consumer basket in drams". It should be mentioned that the IMF and the World Bank have expressed their postive opinion about the CBA's return to a floating exchange rate regime.

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