I am even afraid to write about the USD exchange rate. When I see the exchange rate changes when going to work in the morning, I write about it as soon as I get to my office, but later when going home I see that the rates have gone down again. And thus the digits that I write in newspapers are yesterday’s news when they are published.
For instance, on June 9, the USD exchange rate was lower than the 420 AMD limit proposed in the RA Central Bank budget (it was 415 AMD). It may even be 410 or less as we speak.
We know that the USD exchange rates are going down day by day and that there is no logical explanation for this. As for the CB, we know what they say about this: they say that production is developing, the number of money transfers has gone up at a rapid pace, etc…
On the one hand, you may not agree with the opinion that the deflation of AMD is a “bad thing”. On the other hand it can be both positive and negative depending on different aspects. For example, it is very good for investors. From the national mentality perspective, it is good too because people say that our national currency is growing in its price.
What about the citizens who get their salaries and those keeping their savings in dollars? What about those families receiving money transfers from abroad from their relatives in USD? There are many similar families, mostly the needy. This is simply a tragedy. Let’s bring an example to make things clear. For example someone that works abroad sends $200 per month to his/her old relatives to take care of their expenses. A month ago, they had 90.000 drams to take care of their expenses (450 AMD for 1 USD). Now they can get only 83.000 dram when exchanging the dollar (i.e. less for 7.000 dram). In fact, the purchasing capacity of these people has gone down by 7.7% in just one month. These people no longer believe what the CB and others say concerning the low level of inflation, now they simply believe the reality.
This process is a good method for statisticians to throw dust in the eyes of citizens again and make then believe that we have rapid growth. This year’s budget is 420 billion AMD, which they compared to the USD exchange rate mark of last year and proudly announced that our budget covered one billion USD. Now imagine that the USD exchange mark is going down to 350 AMD for one USD (if there is someone that says that it is impossible, he/she has to explain how it is possible that the mentioned price goes down by 35 dram in one month alone), in this case we will have a budget covering 1,2 billion without any growth. This is an easy method. Everyone knows that as a result of that process, salaries and stipends will not be increased, but instead they will be able to announce about growing marks.
When we say that some people earn money from these changes, many people wonder how they can do that. Let’s bring an example: Let’s say that someone had one million USD a month ago (it is already clear that he is not an ordinary citizen, but someone close to the authorities, etc.), which he exchanged to AMD, getting 450 AMD for one USD. Later he waited for a month until the price became 400 AMD. Now he can buy USD with that money and have 1,150,000 USD, i.e. he can make 150,000 USD in one month without putting in a lot of effort. Besides that this person may be “a very specific person” and may do the same thing not with one million, but with 10 million or more. This may be a person or a group of persons. In fact, after getting the dollars back, the price for it may be increased again, and some time later they may repeat that procedure. A group of people do this when they need money.