Like the Russian ruble, the dram weakened against the U.S. dollar and the euro in the immediate aftermath of Russia’s invasion of Ukraine but rallied strongly in the following months. Since the outbreak of the war on February 24, the dram has strengthened by 15 percent against the dollar and 29 percent against the euro on aggregate.
The Armenian currency has been boosted by relative macroeconomic stability in Russia, Armenia’s number trading partner, as well as an influx of thousands of mostly middle-class Russians. Its continuing appreciation is prompting growing concerns from Armenian companies selling their products in Western and other non-Russian markets.
Kerobian shared those concerns as he answered questions from Facebook users in the RFE/RL studio in Yerevan.
“In our view, 450 drams [per dollar] is a red line for our economy, and such a strong dram is putting a number of export-oriented sectors at serious risk,” he said.
One dollar was worth 415 drams on Monday.
Kerobian claimed that the Armenian Central Bank is also concerned about the dram’s current exchange rate.
“It’s not that the Central Bank is doing nothing,” the minister said. “And it’s not that this is only the Central Bank’s job.”
The bank’s governor, Martin Galstian, made clear last month that it will not cut interest rates or intervene in the domestic currency market to slash the dram’s value. Galstian said that the stronger dram is somewhat easing inflationary pressures on the Armenian economy aggravated by the Ukraine war.
“By artificially weakening the dram we would create an even worse inflationary situation which would hit all citizens, including exporters,” he told reporters on June 14.