Currently the most interesting topic in the society is the potential economic developments. The situation is visually stable in the currency market. The growth of the national currency rate during the past years made a part of citizens to keep their savings in the national currency. According to official statistics, most of the bank deposits in Armenia are in the national currency. The situation changed rapidly during one-two weeks and the future became cloudy. The CB increased the REPO rate for the purpose of preventing the foreign currency demand growth. Increasing the value of money logically cuts down the capacity. Accordingly, it is logical that the demand to such money will fall as well. It is hard to say what will the result of such policy be. On the one hand, it may enable to make the currency market more controllable. On the other hand, all fields of the economy may be faced with financial crisis and lack of financial sources. Certainly one may say that the second version is exaggerated because our banking system has a very small portion of crediting the economy. The real sector of the economy is small and has weak ties with the banking system. Banks are making more money on consumer credits. We will feel that the capacity of the provided resources has been cut down in several months, when we see that the import capacities and domestic production for domestic use have been cut down as well. Such products are mostly produced and sold due to consumer credits. Most people with incomes in the national currency are not interested in the currency market. Even the official statistics reports that the so-called average salary of Armenian citizens is 70,000 dram. People with such small income have nothing to do in the foreign currency market. Pensioners neither buy foreign currency. Due to the efforts of the Central bank during the past years our economy was really dramized (people acquired credibility to dram). At least partially. Small and medium businesses were making their transactions mainly in Armenian dram. They bought foreign currency only in cases when they wanted to buy apartments or products imported with foreign currency such as vehicles and IT products. The biggest buyers of foreign currency were the biggest importers and those who have monopolies in trade businesses. Accordingly, this shock in the foreign currency exchange market shall first of all impact the mentioned people and businesses. The alleged economic growth caused a foreign negative trade balance amounting to 3 billion dollar. Half of this negative balance was being covered by the money transactions of the exported labor. It was reported by the official statistics. The state covered the lack of foreign currency in the market with the borrowings from other countries. The international crisis changed this balance. By saying balance we mean the quiet environment which the government construed as stability. The country lost this stability. The authorities don’t know what to do now. One of the proofs is the fact that on the threshold of the international crisis the CB decreased the REPO rate. Experts understood this because other countries experiencing problems with the crisis did the same in order not to deprive the financial sources of their economies. Cheap money creates demand, i.e. it enables to sell the produced goods and services. However this policy had the vice effect. Definitely the government was afraid of the rapid growth of the national currency and they changed their mind. Ultimately our experience is unprecedented. No other country experiencing problems with the crisis has tried to do that. Accordingly, it comes to prove that our government does not have an action plan. They don’t have such strategy, thus their reaction is adequate to their first perception of the change. Once they see the results of the crisis, they decrease the REPO rate. And when the foreign currency market is shocked, they do the vice versa. It is a long time that unpredictability has become a factor of Armenia’s economy. Probably it is very difficult to work out and implement an effective economic policy in a country, where the biggest paper money is more by 3-4 times than the pension of disabled people. If they divide this money in two parts, they can pay two stipends. If you find any other country like this, inform our government and they may change with experience in order to overcome the complex of decisive loneliness.
