Tuesday, December 9 2014 19:49
Central Bank expects AMD devaluation in Armenia to form 1.5-2% additional inflation
ArmInfo. The AMD devaluation in Armenia will form 1.5-2% additional inflation in Q4 2014 and the following quarters. Afterwards, the given impact will be neutralized within a year, Chairman of the Central Bank of Armenia (CBA) Arthur Javadyan said at today's press conference.
He pointed out that the CBA expects the inflation in Armenia to be at the target level 4% (+/- 1.5%) in late 2014 and in late 2015. "During the next discussion of the monetary policy program, the CBA will thoroughly present the possible impact of the latest developments on the inflation", said Javadyan.
He said that foreign exchange is an important but not a decisive factor influencing inflation. "Naturally, the changes in the exchange rate affect the prices of imported goods, which make up about 37% of the consumer goods basket in Armenia, but the impact of the exchange rate on the prices depends on various factors such as market structure, availability of competitive commodities, elasticity of demand and other microindices. As regards specific product markets, here the prices may also be raised unsubstantially and rumors may be spread about price boost in order to form artificial demand. The relevant state structures attentively follow the situation and will punish the delinquents, should they reveal any violations", he said.
According to the CBA's statement dated 8 December 2014, on 8 December, the Central Bank of Armenia launched daily interventions to restore the balance in the exchange market and the soften currency fluctuations. The interventions will last till the end of 2014. The CBA will continue announcing the ceiling of daily sale amounts till the end of the year to normalize the situation in the exchange market of Armenia. According to the source, the CB will be publishing foreign exchange operations to ensure transparency in the financial market of Armenia. The daily intervention amounts will be reduced gradually until the national currency exchange rate is balanced.
On Nov 24 as compared with Nov 21 USD rose by 16.6 points against AMD to 435 AMD/1 USD. On Dec 8 it was 454 AMD, on Dec 9 as high as 461 AMD/1 USD. Over the last 2.5 months AMD dropped by 13%.
According to the National Statistical Service of Armenia, in Jan-Nov 2014 as compared with Jan-Nov 2013 inflation made up 2.8%. In the national budgets 2014 and 2015 it equals 4% (+1.5%). In Q4 2014 it is supposed to make up 3.2%.
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