CBA stops its interventions in foreign currency market
04-03-2009 18:00:00 | Armenia | Economy
YEREVAN, MARCH 4, NOYAN TAPAN. The Central Bank of Armenia
(CBA) stopped its interventions in the foreign currency market
and returned to a floating exchange rate regime. The CBA
Chairman Arthur Javadian said at the press conference on the
same day that in this way the exchange rate of the dollar will
find its equilibrium level, which will promote economic activity
and job creation in the country and increase the competitiveness
of Armenian goods.
According to the CBA chairman, the equilibrium exchange
rate of the dollar will make 360-380 drams in Armenia in 2009.
By his forecast, the exchange rate is likely to reach this level
in the foreign currency market within two days. In his words,
the policy conducted by the CBA so far was aimed at ensuring
financial stability in the country. In the past 3 months the
capital of the banks grew by 40 billion drams and they purchased
more than 250 million USD. The CBA chairman said it means that
the financial state of the banks is currently quite stable and
they can withstand the economic crisis.
At the same time the CBA expects that the shift to a
floating exchange rate may result in a rise of prices. For that
reason the refinancing rate was raised by 1 percentage point to
7.75%.