By Shakeh AvoyanThe Central Bank of Armenia (CBA) will begin next replacing Armenian currency notes worth up to $1 with metal coins in what its officials described on Friday as a major cost-saving measure.
The CBA will gradually withdraw from circulation banknotes worth 50, 100, 200 and 500 drams. A senior bank official, Gevorg Tumanian, said the more durable coins, minted in Poland, will enable the country to save millions of dollars in monetary expenses in the next ten years. He said the existing dram notes wear out and need to be replaced every two years, whereas the coins can last for as many as 15 years.
The CBA board had initially planned to begin the cash replacement in June, but has recently decided to speed it up. The process is to be completed by April 2004.
Coins effectively went out of broad circulation in Armenia following the 1991 Soviet break-up. The ensued hyperinflation, which required frequent money printing, rapidly depreciated the newly introduced national currency. Its exchange rate stabilized only by the end of 1994. Annual inflation has been kept in single digits.
According to Tumanian, the mass introduction of the coins also reflects the Armenian authorities’ confidence in a continued low inflation.