23:00, 8 January 2011

Armenia reduces dollarization of its economy

In 2010, Armenia saw reduction of the level of dollarization by 3-4 percent, as Arthur Dzhavadyan, Chairman of the Central Bank, has summed up.
According to his story, the reduction of the dollarization of the economy was reached by still slow but certain reduction of the current account deficit, as well as by neutralization of the dram devaluation.

According to Eduard Sandoyan, former Minister of Economy and Finance, dollarization is often a consequence of macroeconomic instability. According to his story, to fight this phenomenon it is necessary to maintain high rates of return in domestic currency, predictability of the exchange rate and stability of the inflation rate.

According to the Central Bank of Armenia, the share of fixed-term foreign currency deposits in the portfolio of residents' fixed-term deposits reached 80.4 percent in November 2010. According to the same data, in the end of 2008, the amount of cash mass was 344 billion drams, in December 2009 - 325 billion, and in June 2010 the mass of cash currency made 274 billion drams.

Author: Lylyt Ovanisyan

Source: CK correspondent