By Emil Danielyan
President Robert Kocharian said on Friday that the renewed strengthening of the national currency, the dram, resulted not only from market factors but also speculative dealing, openly disagreeing with the Armenian Central Bank.
Kocharian was quoted by his press office as demanding “resolute and quick actions” to prevent further currency fluctuations during what appeared to be an emergency meeting with members of the bank's governing board. “According to the president, there are also speculative activities during such currency fluctuations,” the office said in a statement.
The statement did not say what specific action Kocharian expects from the Central Bank after a 6 percent rise in the dram’s value against the U.S. dollar during the first week of this month. The dollar’s depreciation in the Armenian market stopped only Friday, stabilizing at 475 drams.
The greenback has lost ground to other major world currencies in the course of the year, but its fall has been particularly dramatic in Armenia where it was worth 565 drams in December 2003. It has hit hard a large part of the country’s population dependent on dollar remittances from family members working abroad.
The Central Bank has said all along that the dram has been bolstered by a 50 percent jump in those remittances, denying a popular theory about local commercial banks and large-scale importers engaging in speculative trading. The bank’s chairman, Tigran Sarkisian, again ruled out any monetary intervention in the exchange rates as recently as Tuesday.
Kocharian’s meeting with Sarkisian and other board members coincided with a report in a staunchly pro-presidential newspaper which accused the owners of Armenian banks and small currency exchange offices of cashing in on the fluctuations. Citing unspecified “well-informed sources,” the “Hayots Ashkhar” daily claimed that they have colluded to widen their profit margins by buying dollars on the cheap and then selling them at a higher rate hours later.
In recent days the currency retailers have set the dollar’s value lower than the official exchange rate set by the Central Bank.