The Armenian government sees no indications yet that U.S. sanctions targeting more Russian officials and wealthy businessmen could have spillover effects on Armenia’s economy, a senior official said on Wednesday.
The sanctions were announced on Friday in response to alleged Russian meddling in the 2016 U.S. presidential election. Russia’s ruble weakened by more than 4 percent against the U.S. dollar on Monday, its biggest daily fall in over three years. The ruble fell further in the following days amid mounting tensions between Moscow and Washington over the conflict in Syria.
The ruble depreciated sharply in 2014-2015 following the first wave of Western sanctions imposed on Moscow in response to its annexation of Crimea as well as a collapse of oil prices. That also affected Armenia, which is heavily dependent on multimillion-dollar remittances from Russia. The Armenian currency, the dram, lost nearly 20 percent of its value against the dollar in November-December 2014.
Deputy Minister for Economic Development Emil Tarasian sounded sanguine about possible fallout from the latest U.S. sanctions. “What grounds do we have to expect [a repeat of] such developments? I see no such grounds yet. If they loom we will definitely intervene,” he told reporters.
“True, there was a problem in 2014, and we did not have the kind of [positive] effects which we had expected to have as a result of joining the Eurasian Economic Union, including because of the unstable situation in Russia resulting from the sanctions and other issues,” said Tarasian. “But I must say that those problems were overcome in less than a year thanks to our banking system and fiscal-monetary policy.”
“Our economy is ready to cope with such shocks … Right now we are not in a situation where we risk such shocks. There are no problems now in terms of exchange rate stability and other issues,” added the official.
The 2014 financial meltdown also hit hard Armenian companies dependent on the Russian market. Armenian exports to Russia plummeted in 2015. But with the oil price and the ruble rallying afterwards, they grew strongly in 2016 and 2017.
Analysts say the fresh U.S. sanctions could threaten Russia’s fragile economic recovery, which began last year. According to official statistics, Armenia’s economy grew by 7.5 percent last year after stagnating in 2016.