Pressure on the Armenian Dram's Appreciation Continues, Says Central Bank Deputy Chairman

The pressures on the appreciation of the Armenian dram continue. This statement was made by Armen Nurbekyan, the Deputy Chairman of the Central Bank of Armenia, during a meeting with reporters, referring to the publication by the international rating agency Fitch Ratings.

According to the international rating agency, the Armenian dram is expected to depreciate moderately, potentially reaching levels seen at the beginning of the Russian-Ukrainian conflict (in February 2022, the exchange rate of the Armenian dram was 478 dram).

“Fitch Ratings' assessment is a positive phenomenon, as it underscores that our economic growth and stable macroeconomic environment have provided a basis for upgrading our rating. Are there possible scenarios for a certain depreciation of the Armenian dram? Yes, it is possible, and those scenarios are actually twofold: there could be both appreciation and depreciation,” said Nurbekyan.

According to him, the Central Bank of Armenia discusses the exchange rate as a consequence rather than a cause; if monetary flows in Armenia increase, then the scenario outlined by Fitch Ratings will not materialize, meaning there will be pressures for appreciation of the dram.

The Deputy Chairman of the Central Bank noted that Fitch Ratings has included a scenario of moderate depreciation of the dram, which is associated with the growth of productivity and potential in Armenia.

It is noteworthy that the international rating agency Fitch Ratings has revised Armenia's long-term foreign-currency issuer default rating (IDR) from 'B+' to 'BB-' with a stable outlook.