The Armenian dram’s value against the U.S. dollar will likely remain stable despite the continuing depreciation of the Russian ruble, a World Bank official said on Tuesday.
Armenia’s national currency weakened by over 15 percent against the dollar in late 2014 amid a sharp fall in dollar-denominated remittances from Armenian migrant workers in Russia resulting from the collapse of oil prices. The Central Bank of Armenia managed to stop the dram’s depreciation by sharply raising interesting rates and tightening minimum reserve requirements for commercial banks.
The dram weakened against the dollar by less than 2 percent in the course of 2015, making it the most stable currency in the former Soviet Union. Its exchange rate remained virtually unchanged even after the drop in oil prices accelerated in October. By comparison, the Russian ruble has lost a further 20 percent of its value against the dollar and the euro in the past three months.
“In the current situation I do not think the dram is jeopardized,” Laura Bailey, the head of the World Bank office in Yerevan, told RFE/RL’s Armenian service (Azatutyun.am).
Bailey insisted that Russia, Azerbaijan and other oil-rich ex-Soviet states have seen their national currencies plummet in value because of their heavy dependence on oil revenues. “I am very happy to say that I do not see that we are faced with that kind of vulnerability [in Armenia,]” she said.
In recent months, there have been no indications that the Central Bank of Armenia has resorted to heavy dollar interventions in the domestic currency to shore up the dram. In a further sign that the dram is not under strong pressure, the bank repeatedly cut its refinancing rate in the second half of last year.
The benchmark rate currently stands at 8.75 percent, down from 10.5 percent in August 2015.