By Atom Markarian
Armenia’s national currency, the dram, has gained nearly five percent in additional value against the U.S. dollar over the past month, resuming its controversial appreciation blamed by the Armenian authorities on increased remittances from abroad and the greenback’s worldwide weakening.
The dollar was trading at an average of 430 drams in Yerevan’s currency exchange office on Thursday, down from last month’s level of approximately 450 drams. The dram has also strengthened, albeit slightly, against the euro since the middle of April.
The dram is now worth about 30 percent more, in dollar terms, than it was right before the start of its dramatic appreciation in late 2003. The Armenian Central Bank has said all along that that is the result of a steady in growth in multimillion-dollar remittances sent home each year by hundreds of thousands of Armenians working abroad. According to the bank, the cash transfers totaled at least $1 billion last year and rose by 26 percent during the first quarter of this year.
Bank officials also point to the dollar’s recent fall against the euro and other hard currencies which has been widely attributed to investor fears about possible U.S. military action against Iran and the resulting rise in oil prices.
However, the official explanations are dismissed by politicians and economists critical of Armenia’s government. They have long claimed that the surge in the dram’s value has been engineered by the authorities keen to benefit a handful of government-connected Armenian importers of fuel and other basic commodities.
Such claims are trusted by many of those Armenians who are dependent on the dollar remittances. “I have lost a lot from these fluctuations,” said one Yerevan resident as he converted dollars into drams. “I now need $100 to buy something which I could buy for $70 three years ago. Importers are making loads of money at the people’s expense.”
“I think this is the result of games played by local mafiosi,” said another man. “This is not affecting me because I get my salary in drams. But many people get cash from abroad and they have suffered a lot.”