Wednesday, December 17 2014 17:54
Central Bank of Armenia: Armenian dram has experienced hyperdevaluation
ArmInfo. On Dec 17, the Central Bank of Armenia (CBA) sold a total of $4 mln to the participating banks at the average exchange rate of 570.58 AMD/$1 in the course of daily interventions in the interbank currency market, with the cut-off price being 567.65 AMD/$1.
Since the launch of the daily interventions, i.e. from Dec 8 through Dec 17, the CBA sold USD 42mln to the participating banks - USD 6mln daily on Dec 8-12 and USD 4mln on Dec 15-17. The CBA press service has told ArmInfo that over this period the average exchange rate rose from 456.63 to 570.58 AMD/$1 and the cut-off price grew from 455 to 567.65 AMD/1 USD.
On Dec 17, before 2 pm, the average AMD/USD exchange rate in the retail currency market was 550 AMD/$1, AMD/EUR exchange rate - 715 AMD/1EUR, with the former rising to 570 AMD/$1 and the latter dropping to 712 AMD/1EUR, respectively, by 5 pm. In the meantime, the average AMD/RUR exchange rate rose from 8.5 to 8.6 AMD/1RUR.
At a press conference on Dec 17, CBA Chairman Artur Javadyan said that the Armenian dram has experienced hyperdevaluation.
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. In particular, during the first week (8- 12 December) the daily interventions will be $6 mln. Afterwards, the daily interventions will gradually be reduced depending on demand and will be brought to zero by the end of the year.
On December 17, the AMD devaluation against USD continued in the retail currency market of Armenia despite the daily interventions of the CBA. Almost 30% devaluation has been fixed since October. At the moment (5 pm), the exchange rates at swap bodies are as follows: 560/580 AMD/1 USD, 671/752 AMD/1 EUR, 8/9.2 AMD/1 RUR. The optimal rates at the banks of Armenia before 2 pm were as follows: USD was purchased for 550 AMD (ceiling), EUR - 681 AMD, RUR - 8 AMD. The lowest rates of sale were 548 AMD, 687.5 AMD and 8.16 AMD. At NASDAQ OMX Armenia, from June through December 17, foreign exchange operations amounted to $396.7 million drams with the exchange rate growing from 407.14 to 560 AMD/1 USD. Almost no transactions were registered after December 1 (only 100 thsd USD on Dec 10 and 100 thsd USD on Dec 17). The transactions in November alone totaled nearly $117 million drams. On 1-5 Dec, interbank market of foreign exchange operations registered a record-breaking indicator - $59.3 million, which resulted in a 442.42 AMD/1USD exchange rate. In this light, over the period from 1 to 17 December, the stock exchange registered transactions only on Dec 1 ($3.5 million) and Dec 10 ($100 thsd) and Dec 17 ($100 thsd), with no transactions for the rest of the days.
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