Thursday, March 28 2013 17:21
Economist: Armenia will not avoid the foreign negative impact: we have high dollarization level
ArmInfo. Though Armenia's economy is not so integrated in the global markets, the country will be unable to avoid the foreign negative impact, first of all, from Europe, economist, ex-MP from the Prosperous Armenia Party faction Vardan Bostanyan said at today's press conference.
"We shan't avoid the currency fluctuations and USD exchange rate growth, as Armenian economy's dollarization level is high, and the restraining instruments of the financial authorities are not strong enough to reduce it", Bostanjyan said.
He said that the dollarization level is also affected by the high demand for dollars, which is, in turn, conditioned by electoral processes in the country and certain activation of business circles, which are mostly working with dollars. Among the negative factors the economist specified the constant migration of the population that leads to growth in inflow of private transfers. He recalled that in 2012 the inflow of individuals' private transfers via the banking system of Armenia amounted to nearly $1.7 bln. Unofficial transfers inclusive, this figure may reach $3.5 bln. The growing outflow of capital from Armenia due to Armenian businessmen's difficulties in making investments, is also a big threat.
Bostanyan said that the Central Bank of Armenia is doing its best to ensure price stability, using the instruments at its discretion, including currency interventions. "I understand that currency interventions are not the best way to fight the abrupt currency fluctuations, but it is the most acceptable way for us", he said. He added that the megaregulator cannot cope with this problem all by itself, as the price growth is the result of economic policy and the CBA's measures can become effective only in case of a coordinated and grounded approach to the monetary and fiscal policies.
By the CBA's data, as of 1 Jan 2013, Armenian economy's dollarization level made up 45% (up 3.2 points versus 1 Jan 2012).
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