According to the ”Law on Central Bank” the main goal of the RA CB activities is to provide price stability in Armenia. Reached goals justify the means used for reaching the goal. So what kinds of means have been used till now which are not justified and which the CB wants to revise? Since 1994 the CB has implemented a strategy of financial aggregates. This means that the CB regulates inflation by influencing on money capacity. But according to Mr. Sargsyan this leverage didn’t work during these three years because of the economical growth. ”Because of the economical development the financial base increase covered 40 %, in case when we expected it to be 8 %. Rapid changes of planned marks influenced on the reputation of the CB”, said Tigran Sargsyan. According to this new strategy the CB will publish a new mark or range of inflation mark for one year or other fixed period, and after this in case there is any variation from this range the CB will have to explain the reasons to people. “We expect to have new quality changes in our policy: starting from January the new instrument to influence on inflation will be interest rate”, says T. Sargsyan. Maybe the CB is not able to control the money capacity and they have chosen a new instrument, which is the money price (interest rate). By the way, one of the reasons that it is difficult to manage and control inflation in our country is the fact that the capacity of dollars “in shadow” in our economy is much.
Tigran Sargsyan also spoke about the present level of inflation. He said that the average mark of inflation in Armenia in 1998-2004 covered 2,4 %. He also said that there was price seducement for 2,4 % during these last 11 month, in which “nobody believed”. One of the students there said that in spite of the official mark of price seducement the society felt the price increase in practice, in connection with which T. Sargsyan said that there was no country where citizens didn’t complain about rate increase.
So why doesn’t CB realize a policy of exchange rate control? Because in order to do this our country will need in huge sums to enter the international market whenever it needs.
The CB head also spoke about the reasons of USD exchange mark decrease. He said that the main reason was the huge money transfers from abroad, which capacity will exceed one billion dollars at the end of the year. But T. Sargsyan said that there was another reason for this too: “when dollar reaches Armenia its price is already reduced”. According to Tigran Sargsyan this kind of increase of USD price will create good conditions for domestic producers to be stable in the international market and export more. It is worth to mention that these new theoretical ideas of Tigran Sargsyan make us think…
He made one stranger announcement too. The new macro economical marks on the part of the CB will differ from the same marks of the government. But Tigran Sargsyan said that the CB would follow their own numbers, because they are responsible for those numbers.