of the ruble will have a negative impact on Armenia`s economy - Expert

ArmInfo. Armenia is heavily reliant on foreign financial markets, particularly the Russian ruble market. Under these conditions, experience shows that a sharp devaluation of the Russian ruble can have a negative impact on our economy. Aghasi Tavadyan, the expert of the research center and founder of the analytical portal tvyal.com, shared these insights on his social network.

transportation of energy resources>, Tavadyan noted.  In addition, the President of the European Commission Ursula von der Leyen, after her re-election, said that the European Union will no longer buy Russian gas, a decision that also affected the price of the ruble.  Additionally the expert pointed out that in Russia the ruble tends to depreciate at the end of each year, since Russian enterprises which have taken out loans in foreign currency, repay their obligations at the end of the year, leading to an increased demand for foreign currency and a depreciation of the ruble. 

As a result of these events, the RUB depreciated from 100 rubles per dollar (November 17) to 115 rubles (November 27). However, this effect was short-term, as the market had already settled. Currently, as of December 9, 1 dollar is already equal to 99 rubles.  The exchange rate fluctuations that caused some anxiety in our market have already died down,> he emphasized.  The expert notes that Armenia is significantly dependent on foreign financial markets, especially on the Russian ruble market.

Tavadyan believes.

At the same time, as the economist pointed out, the Armenian dram has been the most expensive currency among all convertible currencies since 2022. This had a negative impact on exports, tourism and the IT sector, making them more expensive. For example, in 2022, when 1 dollar cost about 480 drams, the IT sector received 4.8 million drams out of 10 thousand dollars. Now they receive about 3.8 million drams. In other words, the IT sector, along with the tourism sector and exporters, have suffered losses of 1 million drams due to the strengthening of the dram, he added.

< While the devaluation of the dram may benefit the real economy by reducing the likelihood of further shocks, it is not advantageous for the Central Bank and the government. From the perspective of the Central Bank, it is inflationary and can result in capital outflow. From the government's point of view, it will lead to an increase in public debt and its maintenance, as well as a decrease in GDP indicators when measured in dollars,> Aghasi Tavadyan concluded.