Ըստ Սմբատ Նասիբյանի՝ դոլար–դրամ արդար փոխարժեքը 550-600 դրամն է
Armenia is falling into a new crisis, however, for instance, Smbat Nasibyan, founder of the “Converse Bank”, former president of the Board, also former member of the Board of the Central Bank, believes that crises, in general, are good. Mr. Nasibyan observed that crises are the beginning of undertaking new things, a precondition of thinking of new things and be consolidated.
In the conversation with Aravot.am, Smbat Nasibyan said that this crisis would be more painful and the shock would be more profound than Armenia had suffered in 1994 and 1998 with the influence of Russia’s crisis, and it would be more painful than the influence of the international crisis in 2008-2009. In those years, according to Nasibyan, it was the international crisis when the dram sharply devaluated on March, also the incorrect policy of financial leaders of Armenia and afterwards, the moves resulted in the current situation. “The then solutions resulted in the greatest decline of gross domestic product, 14.6-18 %.” Caption Smbat Nasibyan
As said my Smbat Nasibyan, it is necessary to undertake certain steps, more specifically, to develop several scenarios, discuss and understand by which option to move on so that Armenia would come out of the crisis with minimal losses. “What happened in 2008? The money supply was reduced, and in addition that the dollar was sold prior to the well-known “critical” situation, which did not the right for it, 400 million dollars was the consumption of our foreign reserves, and then a restraint of money supply happened, which led to a situation that a dram devaluation happened in the economy, the dram depreciated. In other words, to stabilize the exchange rate, at some level, a large amount of dollars was sold, and a reduction of the money supply happened.
In October 2008, in the flourishing period of our economy, the money supply in the market was 600 billion AMD, and in April of 2009, it became 361 billion, reduced in half.” The economist suggests to discuss and understand whether it is worth repeating the policy of 2008-2009, or apply another mechanism. Mr. Nasibyan opines that if the monetary policy of 2008-2009 is repeated, then simply, the economy will so collapse.
The other option, as said by Nasibyan, is really to leave a floating exchange rate, and it “floats” as long as there would be an acceptable exchange rate for the market economy. To the observation of Aravot.am that people are in a panic, and they seem not to be ready for this situation, Mr. Nasibyan said, “Yes, now, there is a panic, steps could be made not to get to this situation. I guess the financial leadership did not expect, they believed that 411 AMD for 1 dollar if a fair exchange rate, and at that time, they did interventions. In my opinion, it shouldn’t be done: to wait until the upper limit, when the market would calm down. I think that our financial leadership is cut off the reality and is confident that our positions are in a good shape, they have left the impression of self-confident that there would be no large fluctuations in the exchange rate, and with some amount they would be able to make the market calm down, they believed that it would stop on 410 AMD for 1 dollar, at the level of 411 AMD,” said Nasibyan.
According to him, up to now, there is no significant analysis to understand what correlation connection is there between the imported, exchange rate and budget performance. Now, the situation in the region is critical, and as the economist said, it is impossible to make right moves without having options, we need to do calculations and analyses. Mr. Nasibyan has calculated that the fair dollar-dram exchange rate is 550-600 AMD. Presenting approximate figures, the economist expressed a confidence that under this exchange rate, although the society and we all would become poor, but the budget will be performed. “In the event of 550-600 exchange rate, our budget would come to balance, and there would be an automatic reduction in imports. For example, if the import reduction amounts to about 1 billion dollar, it would bring to a budget reduction of about 400 million dollar, the exchange rate should be 550-600 AMD to compensate it. Everything is very simple in Armenia. In other words, by roughly numbers, the export is 1 billion dollar, 1 billion comes from the tourism, and 2 billion from transfers.
Now, the transfers will arrive in rubbles, and only at the expense of devaluation of the rubble, the transfers will be reduced by half, and if we add Russia’s poor indicators of economy, the transfers would be reduced by about 1 billion, not to speak about other factors. I see a connection between the exchange rate and our budget performance, because about 33% of the amounts from our imported goods go to the budget, from which the 20 % is the value-added tax, and the rest is the amount for the customs clearance. This by my estimates is about 1,3-1,5 billion dollars, if our import is reduced by this much, only due to the lack of finances, the budget will not be performed. If we try to keep the exchange rate, let’s say, to 420 dram, it would lead to reduction of import due to reduction of further dollar entries, as well as failure to budget performance.
We need to create a base to get out of the crisis with minimal pain, rather than thinking that everything is fine. The balanced exchange rate is 550-600 AMD, during which, the import will be reduced, but the budget will not suffer, this exchange rate will compensate the reduction of the entries that we expect. The exchange rate higher than 600 AMD would already be threatening, in this case, we need to intervene.” Note that currently the cost for 1 dollar has already reached 580 AMD.
Nelly BABAYAN
