Friday, December 24 2010 11:44
Inefficiency of Armenia's financial system gives rise to high inflation
ArmInfo. Inflation has become the gravest "event" of 2010. Its level upon the results of 2010 can make up 10%, ex-Head of Armenia's Central Bank Bagrat Asatryan said when summing up the social and economic results of the departing year. According to him, such a high level of inflation was fixed in Armenia for the first time in 1997 and was caused primarily by the price liberalization process in the country but not by pure economic factors, like in 2010.
B. Asatryan recalled that control of inflation risks is one of the major tasks of Armenia's Central Bank. "For this purpose, CB has been applying different tools during the year, however, their efficiency turned out to be extremely low", Asatryan said. He drew the journalists' attention to the fact that the country's CB is returning to the policy it took on board in 2008-2009, when a mega-regulator carried out currency interventions in the market. He also said the foreign exchange reserves of Armenian CB over 10 months of 2010 reduced by $160 mln.
According to B. Asatryan, Armenia's financial system works inefficiently. He confirmed his estimation by a number of indisputable facts. In particular, as he said, dram revaluation in December 2010, as compared to the similar period of 2009, revaluation of dram to dollar made up 5,5%, to Euro - 15%, to ruble - over 7%. B. Asatryan assures that in conditions of dram revaluation, the influence of "external" factors on inflation, of which the economic authorities of our country often recall and by which they explain the high level of inflation, had to be insignificant.
To note, inflation in Armenia in November 2010 made up 1,6%, over Jan-Nov 2010 - 7,5%, in November 2010, as compared to the similar month of 2009 - 9,6%.
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