We Are Still in the Midst of a Crisis, Says Central Bank Chairman

We are in the midst of a crisis that has not occurred with us for at least the last 40-50 years, and we know that there is a phenomenon called inflation, and even in countries like the USA, such inflation has been recorded, which probably last happened to them in the 1980s. This was stated today, June 22, during the Orion-2022 summit by the Chairman of the Central Bank of Armenia, Martin Galstyan.

“The mandate of the Central Bank is to ensure price stability and a predictable price trajectory for the economy as a whole, and we use the exchange rate as a tool. I do not want to accept that our currency is strong as a compliment; it is an exogenous factor that is happening to us in connection with foreign visitors to Armenia. It is also due to the increase in exports from Armenia,” he said.

The Central Bank chairman noted that in recent days, many foreigners can be seen in restaurants in Armenia: “All of this, according to statistical rules, must be recorded as exports, therefore, we are witnessing an incredible increase in exports and imports, which, of course, leads to the appreciation of the national currency.

Now the call from the public, especially from exporters, is to artificially devalue the Armenian dram; they are calling on the Central Bank to intervene and devalue the Armenian dram, which is likely to help Armenian exporters become more competitive abroad. But is a 5-10% devaluation of the dram the incentive that Armenian exporters need to be effective? In my opinion, that is not a solution; the solution is to be unique. Therefore, if we want to be unique, there are several things we need to do together, so I do not pin my hopes solely on an artificially depreciated exchange rate as a tool of our innovative policy,” Martin Galstyan announced.