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Armenia’s national currency, the dram, has unexpectedly rallied against the U.S. dollar and other major world currencies, reversing a major depreciation observed last week.


After months of relative stability, the dram began slowly weakening against the dollar in mid-February. The process sharply accelerated on March 15, with the Armenian currency losing almost 2.4 percent of its nominal value in the next four days, despite apparently significant dollar injections in the local currency market made by the country’s Central Bank.

The fall sparked panic buying of dollars in currency exchange shops across Yerevan last Thursday. Some of them stopped selling the U.S. currency as a result.

The dram has rebounded since then. On Tuesday alone, it strengthened against the greenback by over 1 percent, trading at 394.5 per dollar at the Yerevan stock exchange and regaining the exchange rate that existed over a week ago.

The modest volume of currency transactions at the NASDAQ OMX Armenia exchange reported on Friday, Monday and Tuesday suggests that the dram rally did not primarily result from Central Bank intervention.

The bank appears to have spent over $120 million of its hard-currency reserves on shoring up the dram between last December and February. Unlike opposition politicians and other government critics, it has downplayed the latest exchange rate fluctuations.

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