By Atom Markarian
The total amount of hard currency transferred to Armenia, mainly by its citizens working abroad, jumped by 50 percent to over $500 million during the first nine months of this year, the Armenian Central Bank reported on Monday.
Bank officials said private remittances, a key source of revenue for a considerable part of the country’s population, accounted for at least 85 percent of the external cash influx that has helped the country cope with its huge trade and current account deficits over the past decade.
They said 55 percent of the money was sent from Russia, the principal destination of hundreds of thousands of Armenians that have left their homeland in search of employment. The United States was said to be the second biggest source of the transfers with a 15 percent share.
The Central Bank figures mean that Armenia has already received more remittances from abroad than during the whole of last year when they totaled about $500 million or 20 percent more than in 2002.
Meeting with the chief executives of Armenian commercial banks, the Central Bank chairman, Tigran Sarkisian, also stood by his view that the soaring cash inflow is the main factor behind this year’s dramatic strengthening of the dram.
The national currency has registered a more than 10 percent increase in its value against the U.S. dollar and the euro since December, sparking conspiracy theories about government-sanctioned speculative trading in the Armenian financial market. The Central Bank insists that the increased dollar supply could not have failed to boost demand for the dram and thereby push up its value.
The dram’s strengthening has hit hard those families that are dependent on the hard currency sent by their relatives working abroad. It has at the same time curbed inflation and, in particular, left Armenia virtually unaffected by the global surge in oil prices.
(Photolur photo: Tigran Sarkisian.)