By Shakeh AvoyanArmenians are slow in embracing their national currency, the dram, despite its dramatic appreciation against the world’s two most important currencies, the Central Bank of Armenia (CBA) said on Thursday. A household survey conducted by the bank suggests that while many people are now prepared to convert their dollar-based savings, they mainly prefer the euro to the dram.
CBA officials said 57 percent of some 2,300 people randomly polled across the country have until now kept their cash in the U.S. currency and nearly one third of them would like to switch to the euro. Only 6 percent said they have euro savings at the moment.
According to the survey, the dram’s share in the overall savings is only likely to grow from the current 35 percent to 37 percent in the coming months. In the words of Hakob Zorian, head of the CBA’s Statistics Department, Armenians continue to distrust their currency because their memories of the hyperinflation of the early 1990s still run deep. Zorian said it will take several more years to eradicate what he described as a “dollar hysteria.”
The dram, which was introduced in November 1993, has gained over 20 percent in its value, measured against the dollar, and 15 percent against the European Union's common currency since the beginning of 2004. The CBA chairman, Tigran Sarkisian, said last month that it could rise against the dollar by another 10 percent in the course of this year.
Sarkisian and other Central Bank officials attribute the phenomenon to a 50 percent jump in cash remittances sent last year by Armenians working abroad. The bank estimates them at $760 million. Officials say the real figure could be twice as higher.
The dram’s strengthening has hit hard Armenians dependent on those remittances. The CBA survey shows that about 40 percent of the country’s population receives financial aid from abroad. Zorian claimed, nonetheless, that it is mostly middle-class and wealthy citizens that have borne the brunt of the dollar depreciation.
Zorian also said the poll found that 55 percent of Armenian households live in poverty. The figure differs markedly from a 42 percent poverty rate cited by the Armenian government.