Dollar panic?

Armenian Dram Memorial
Armenian Dram Memorial © Artur Papyan

The website of Armenia’s Central bank has been posting some really interesting data recently. While the US dollar exchange rate has remained quite steady at about 305 drams per 1 US dollar, the striking differences in the volume of foreign currency trading on 24th, 25th and 26th of February cause real concern.
On February 24, for example, the volume of US dollar trading is reported as $ 14,910,000 US. On 25 – there is a drastic rise to $ 25,348,000 US, and today – all of a sudden – there is a figure of $ 3,292,000 US. Meanwhile, no obvious major factor seems to have impacted this situation. The average balanced exchange rate in all three cases is reported as 305 drams per 1 US dollar.
Meanwhile, people keep telling me there is panic in the banks and currency exchange shops and how lot’s of people are rushing to get rid of their Armenian drams.
More specifically, my accountant told me today, that there was a $1000 limit set in Artsakhbank’s exchange shop in front of Yerevan Cinema on Tigran Mets street for US dollar exchanges. The clerks were asking for passport for US dollar transactions, while for Euro or Russian rouble there was neither limit, nor passport inquiry.
Interestingly, Azg Daily had pulished an article on Tuesday, where it blamed the opposition media for using “the criminal tactics employed by Soros” of spreading news about devaluation of national currency. Azg was criticizing the “certain media” for ”disseminating false information about Armenian dram’s devaluation”.
Well – from what we’ve seen so far – the dram’s exchange rate is steady, but CBA figures contested with eyewitness accounts of what’s actually happening in the banks and exchange rate shops seems to signal big changes ahead. Today’s $ 3,292,000 US figure may mean one of the two things:
1) The CBA has imposed limits on exchange rate operations trying to prevent the fall of the AMD, or
2) The CBA has decided to give up selling off US dollars trying to maintain the AMD rate at the 305-306 level, and we will soon witness a significant fall of AMD value against the US dollar.
Frankly, I don’t know  and thankfully – I don’t have any money to worry about!

Artur Papyan

Journalist, blogger, digital security and media consultant


  1. It is well known that CBA was keeping the AMD exchange rate artificially high for some time which benefited the importers and killed the remnants of exports. Now with the global economic recession and hence the decrease of foreign currency supplies in form of transfer it is a hard task to keep the value of AMD at that level. As a result CBA was injecting the public USD reserves to keep this policy going on. Their hope was borrowing. At some point the reserves will finish and dram will collapse.
    It is funny that the regime is blaming the opposition for its ridicules policies. It is even funny that Azg is blaming Soros. I haven’t read the article but I wouldn’t be surprise if it blames the Jews and free-masons.

  2. A friend just suggested that there’s a third option: that there is no more USD left for the CBA to use for maintaining AMD rate at the designated level. I don’t know – that sounds unbelievable, but than again – who knows? 😀

  3. Seems like situation is getting worse. Although the CBA has published trading volumes of over 22,000,000 USD, the people seem to have gone wild. Onnik just Twittered about “mobs of people outside banks in Komitas”, apparently rushing in to exchange their AMD for USD.
    This is VERY untimely with the big opposition protest planned in two days.

  4. Was worse today. Yesterday I went into one bank on Kassian and the security guard was jamming the door shut by literally leaning on it from inside. He then stuck his head out and said only when one person left could I be let in.
    However, it was just me waiting outside until another person came and waited as well. I gave up after 10 minutes and decided to go back again today. However, this time there was about 30 people waiting outside. Undue panic or serious crisis looming?

  5. Why USD only, EURO is more stable?

  6. […] Armenian Observer reports that many in the country are rushing to change their local currency into dollars and limits have been introduced at currency exch…. Cancel this […]

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  8. Hi, I haven’t read this blog in a while. Sorry, but will get back soon.
    Thanks for reporting Ditord. For people outside Armenia it is very interesting and *important* to see what’s the financial mood inside the country and its populace are.
    I’ve just posted a “Scoop” to this blog entry on Khosq
    I’m getting the suspicion that they’re imposing the CB restrictions, so as to sell dolars on Black Market. As we learn from Big Lebowsky, Marx and Lenin had simple formula for this kinda things: always look for the guy who has the most interest in the current state of affairs. AND who has most interest to see the price of dollar hype up on the black market higher than dollar’s real value???? The BIG Exporters… and Who are those?
    The ones that sell natural resources, trees and national industries!!!
    They know that the dollar is about to collapse again on international financial markets, so they hype up the existing panic so as to hype up the dollar price on the black market. I think it’s the Fat-Cats looking to rip people off BIG TIME on artificial speculations.
    I’m not gonna get into technical details of how this is going to happen, but mark my words: the EURO will jump up in price tomorrow or the comming days, if it doesn’t do so already.

    1. Garen – I don’t think they’d want to do that with the big opposition rally looming close. It would be stupid, and no matter what you think – the guys at the CB and the government aren’t stupid.
      A lot of this has to do with sheer panic, I’m afraid. All in all – we need the dollar rate to rise because we need to boost our exports. So this might after all turn out to be a positive development.

      1. Obviously I don’t think that the guys at the CB are “stupid”. (Though one must admit that some of the fiscal policies that came from higher echelons were not just stupid, but dumb)
        Please read closely what I wrote.
        Panic? Yes. And that’s the whole point. Dollar is really worthless at the moment, and it’s going to continue tumbling down (in fact, all major currencies are tumbling down in terms of their real (rather than nominal) values. We just don’t notice the extent of this tumbling, because they’re all falling simultaneously). ;))
        There’s the global financial implosion. Yes. But there are also some internal factors that create this panic and no doubt benefit from it.
        If one wishes to make sense of what’s going on, it is best to start by looking for who will benefit most out of this. That’s all that I’m saying.
        BTW, you’re saying that this *may* turn out to be a positive development. Considering the size of the trade deficit, I hardly see how this could be the case for the average Joe. This situation, however, will benefit some… But they are a select few!

        1. Points taken. Thanx.

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  11. Cmon now, Of course the government messes around and artificially bumps up the rates….. I think they do this especially during the summer times, in order to make more juice of tourists etc. Look for the DRAM to drop vs both the ERUO and the DOLLAR

  12. Demand give political games more power 🙂

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