ArmInfo. Dram revaluation may lead to the repeated "destruction" of the industry. Armenian Minister of Economy Vahan Kerobyan expressed a similar opinion in an interview.
In this regard, he recalled his experience as the head of a supermarket chain in the early 2000s, when a sharp revaluation of the dram was registered on the market. "I witnessed how our producers and exporters suffered during this period, how locally produced products on store shelves were replaced by goods from Russia, Ukraine, Turkey, etc.," he said.
Consequently, Kerobyan stated that as long as he holds the post of Minister of Economy, he cannot allow the repetition of past scenarios, referring in this context to the industrial development policy adopted by the government.
Noting that the indirect beneficiaries of the processing industry are farmers, the Minister noted that the latter should be kept in the spotlight, given their level of income.
Giving an assessment of the policy of the Central Bank in the current realities, the official noted: "We live in a non-trivial time, and as of today it is necessary to use all the tools so that the economy reaches high growth rates." At the same time, he pointed to the large amount of work that the Ministry of Economy is doing to share control over inflation with the Central Bank, in particular, through subsidizing the import of various goods and activities.
Earlier, Head of the Central Bank of Armenia Martin Galstyan, in response to calls for the need to artificially enter the market, devaluing the existing exchange rate by the Regulator, which may help a certain segment of the business - exporters - he drew attention to the fact that as a result, the general public will pay for such actions. "If we go against our mandate, artificially devalue the dram, then we will face a new wave of inflation which will affect everyone," the head of the Central Bank said.
In the current conditions, he noted the importance of the state's sectoral policy, on the basis of which the most affected sectors that have lost their competitiveness will receive assistance from the state in the form of additional subsidies, tax cuts, etc. Earlier, Armenian entrepreneurs issued a statement in which they indicated that the exporters of agricultural products, beverages, as well as the tourism sector, the IT sector and developers, suffered the most from the strengthening of the national currency.
In particular, it was noted that the financial authorities of the country benefited from this situation. <They are afraid of incurring reputational damage due to inflation, because in order to stop the revaluation of the dram, it will be necessary to buy the currency, which in turn will spur inflation. In short, to create the impression of short-term gain, officials are sacrificing long-term development and growth>, the statement said.
In the current conditions, he noted the importance of the state's sectoral policy, on the basis of which the most affected sectors that have lost their competitiveness will receive assistance from the state in the form of additional subsidies, tax cuts, etc.
It should be noted that in the foreign exchange retail market of Armenia from October 2021 to June 22, 2022, the dram revalued against the dollar by 14% (from 485 AMD/$1 on average), against the euro - by 22% (from 563 AMD/1EUR on average), while devaluing against the ruble by 6% (from 6.7 AMD/1RUB on average). It is appropriate to note that the unprecedented western sanctions imposed on Russia account for the highly volatile market since this March. In particular, this year, from February 24 to June 22, in the retail currency market of Armenia, the dram devalued against the Russian ruble by 19% - to 7.1 AMD/1RUB on average. At the same time, during this period, the dram revalued both against the US dollar - by 13% to 417 AMDs / $ 1, and against the euro - by 19% to 439.5 AMD / 1 EUR.