Armenian dram proves to be the most stable currency in the region

ArmInfo. Armenia is in a more advantageous situation than the other countries of the region in terms of national currency stability, economist Karlen Khachatryan said at a press conference on Wednesday.

"Over the past few years the Armenian dram (AMD) has experienced 20-21% depreciation against the US dollar, whereas in Russia, Kazakhstan and Belarus the national currencies depreciated by almost twofold.  In Ukraine, the currency has suffered 200% depreciation.  Azerbaijani manat devaluated by 105%, Georgian lari - by 40-43%. Amid the specified indicators, one can say that the Armenian dram has proved to be the strongest currency in the region," the expert said.

He pointed out that tangible depreciation of AMD would have a positive effect on the export potential of Armenia, though it would reduce the population revenues and would consequently result in social problems. However, when comparing the living standards and the growth in export indices, the economist said that special attention should be paid to the first factor, because the matter concerns the welfare of broad public strata.

To note, in 2014-2015 each of the EEU countries experienced currency depreciation. Kazakhstan conducted the first depreciation preventively - in Feb 2014 the National Bank refused to retain the tenge exchange rate and the tenge/dollar exchange rate rose by over 15%. This depreciation, along with many other factors, resulted in weakening of the national currency of Kyrgyzstan, which devaluated by 14% against USD in 2014. The next and stronger devaluation wave was caused by the financial crisis in Russia in Dec 2014. At that time, the Russian ruble depreciated by 50%, but then revaluated a little.  As result, the RUR depreciation in 2014 made up 39%. On the threshold of the RUR collapse in December and in the run-up to accession to the EEU, the financial authorities of Armenia decided to improve the exchange rate by taking the 26 Nov 2014 decision to reduce the AMD/USD exchange rate by 4%. However, the following events in Russia stimulated further drop of the Armenian national currency. As a result, AMD depreciated against USD by 14.2%. Following the Russian ruble devaluation, the Belarusian economy also experienced depreciation - by 40% in Dec 2014-Jan 2015. The temporary stabilization of the national currencies in Q2 2015 was over in August, when the dropping Russian ruble was followed by depreciation of Belarusian ruble, Kazakh tenge, Armenian dram and Kyrgyz som.