By Shakeh Avoyan
Armenia’s busiest currency traders went on a brief strike on Thursday in protest against the closure of about two dozen currency exchange offices blamed by the Central Bank for recent turmoil in the local financial market.
The traders whose small offices are concentrated on a street in central Yerevan claimed that they are being unjustly penalized for the dramatic and unpopular appreciation of the national currency, the dram.
The dram has surged by over 25 percent against the U.S. dollar since the beginning of last year. However, it briefly and mysteriously lost 10 percent of its value on May 5, sparking fresh speculation that the exchange rate fluctuations have been artificial.
The Central Bank blamed the phenomenon on illegal cash transactions which it said were carried out by business people involved in the informal sector of the Armenian economy. It announced on Wednesday the closure of 17 currency exchange bureaus in Yerevan.
The move followed President Robert Kocharian’s high-profile meeting on May 11 with the chief executives of the Central Bank and Armenian commercial banks. He suggested that some of them may have engaged in “shadowy transactions” in the currency market and warned of “serious consequences.”
A meeting between Kocharian and members of the Central Bank’s governing board last December was likewise followed by the closure of some dozen currency exchange offices.
Vache Gabrielian, one of the board members, told RFE/RL that they failed to use cash registers and issue receipts for every transaction. He also dismissed protests by scores of other currency traders.
“The strike does not create serious problems for the public standpoint because such services are provided by banks and other exchange offices that are not concentrated in one place,” Gabrielian said.
The Central Bank has also toughened its currency trading regulations that now require new exchange offices to be located at least 50 meters away from each other.
The bank and the Armenian government attribute the dram’s strengthening to a sharp increase in multimillion-dollar cash remittances sent home by Armenians working abroad. But their political opponents dismiss this explanation, alleging a high-level conspiracy designed to benefit large-scale importers of key commodities to Armenia.