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The Armenia dram rallied against the U.S. dollar for a second consecutive day on Friday amid more signs of stabilization in Russia’s volatile currency market severely affected by falling oil prices.

The dram strengthened by another 5.7 percent throughout the day, trading at an average of almost 450 drams per dollar.

The Central Bank of Armenia (CBA) again reported no hard currency injections in the local market. The CBA said that Armenian commercials banks declined to buy dollars from it for the second day running.

The CBA also continued to stick to its benchmark interest rate, which has remained unchanged at 6.75 percent since August. The dram began depreciating against the dollar and the euro in early November.

According to the Yerevan daily “Haykakan Zhamanak,” the Central Bank has instead drastically increased its minimum reserve requirement for commercial banks, forcing them to buy large amounts of drams. The paper said the decision was made on Wednesday in response to the dram’s sharp depreciation widely blamed on the collapse of the Russian ruble.

The ruble’s strengthening in the last three days appears to given the Armenian currency a further boost. Armenia’s financial system is heavily reliant on large-scale remittances from Armenian migrant workers in Russia.

Ara Galoyan, an economist, agreed that the developments in Russia and the “very interesting decision” taken by the Armenian authorities are the main factors behind the dram rally. In his words, the key challenge facing the authorities now is to help lower the increased prices of key imported goods to pre-crisis levels.

“The toughest thing awaiting us is inflation,” Galoyan told RFE/RL’s Armenian service (Azatutyun.am). “If we manage to somehow mitigate [higher] inflation in January and February the dram could be a fairly stable currency.”

The increased prices of imported foodstuffs such as flour and sugar sparked an anti-government protest in Yerevan on Friday. About 100 people gathered outside Prime Minister Hovik Abrahamian’s office, saying that the authorities are not doing enough to get government-linked importers to reverse what they believe are unjustified price hikes.

The small crowd booed and chanted “Shame!” when it saw the most famous food importer, Samvel Aleksanian, come out of the building. Aleksanian refused to comment when approached by journalists. A government spokeswoman did not confirm or deny that the tycoon met with Abrahamian. The premier publicly decried “baseless” price hikes on Thursday.

The Yerevan City supermarket chain owned by Aleksanian lowered some prices on Friday. But they were still above last month’s levels. Other, smaller grocery stores in the capital did not yet cut any prices. One shop manager complained that some of his wholesale supplies are still withholding their food products because of the exchange rate instability.

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