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Statement of Armenian National Congress (HAK) Regarding Central Bank Decision
The Armenian National Congress (HAK), an umbrella organization of opposition political forces led by Levon Ter-Petrosian, has issued a statement regarding yesterday’s move by the Central Bank of Armenia to revert to a floating exchange rate for the Armenian dram. Below are a few excerpts.
On March 3, the Central Bank of Armenia adopted a decision to cease the policy of a fixed exchange rate for the Armenian dram, resulting in a 20% devaluation of the dram in one day. The Central Bank had provided no specific explanation regarding the expected policy change and this led to a chaotic situation in the economy.
With this decision the regime verified the forecast of the HAK, made by its economic committee and particularly the speech made by Levon Ter-Petrosian on March 1, stating that the regime wouldn’t be able to maintain the policy of preserving the dram exchange rate and would be forced to adopt a decision leading to the collapse of the dram.
This decision, leading to a chaotic situation in the economic system, is a result of the regime’s belittling of the reality of the global crisis and the criminal and short-sighted policy directed to serve the interests of the oligarchs and to prop up a flawed economic system.
The HAK has issued numerous warnings that in order to withstand the global economic crisis it was vital to exercise a floating dram exchange policy and to cease the plunder of foreign reserves.
If a policy of a smooth transition to a floating rate from a fixed one had been initiated at least at the beginning of the crisis, in October-November, it would have been possible to mitigate the potential impact of the crisis and to avoid the cave in that we witnessed on March 3.
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