Armenia loses one four of its international reserves

By: Mushvig Mehdiyev

International reserves of Armenia have decreased by 25 percent this November compared to the same period of last year. In other words, it has dropped from $2 billion to $1.5 billion, said the Armenian Radio Liberty.

Vaahn Khachatryan, an economist, says the mentioned indicator of the international reserves is the lowest since 2009.

“It is a serious blow on Armenia’s credibility,” he said. “Eventually, Armenia will be recognized as an insolvent county. International organizations or countries, which are in a financial relations with Armenia, could halt their activities. For instance, the government plans to receive $280 million in loan this year. Poor international reserves may lead to the limitation or cancellation of that loans,” he said.

Meanwhile, the Central Bank of Armenia has not yet revealed the official data for December.

Khachatryan noted that there is no ground for a growth in Armenia’s international reserves, as well as an optimistic expectation in terms of the dram’s strengthening even early next year.

“The existing situation inside and around Armenia is not favorable, as the dram’s depreciation has again gained momentum during the last week,” he said.

Arthur Javadyan, Head of the Central Bank, guaranteed a financial stability in Armenia, saying that the full penetration of economic problems in the region and particularly in Russia into Armenia’s economy is impossible.

The authorities and Prime Minister Hovik Abrahamyan have earlier called the people to calm down, as they claimed there was no financial hassle in the country and the dram has regained its previous position against the dollar and euro.

But the recent developments in the exchange markets has ruled out pledges by the authorities, while the dram has been standing on a regular 3-5 point daily devaluation trend since the end of the last week.

According to the latest statistical data, Armenia’s foreign exchange reserves has dropped even below the red line over the last years, as the country failed to follow the international experience amid a negative balance between its international reserves and national imports.

Sergey Gerasimchuk, a Ukrainian economic analyst, said Armenia could avoid a deep crisis in a short-term perspective given its partnership with Russia under the Eurasian Economic Union (EEU).

“But the Russian and Eurasian integration projects will not succeed amid the tough economic crisis in Russia and serious disagreements within the EEU, which cause a serious threat to Yerevan,” he added.

SOURCE: Azer News