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Armenia Says New 100,000 Dram Banknote Won't Spur Inflation

The new 100,000 dram banknote

The new 100,000 dram banknote

YEREVAN -- An Armenian Central Bank official says the introduction of a 100,000 dram banknote does not increase the risk of inflation or delay an imminent devaluation of the national currency, RFE/RL’s Armenian Service reports.

Central Bank board member Vakhtang Abrahamian told RFE/RL that specialists studied the issue and concluded that the introduction of this large banknote -- worth about $265 -- does not threaten any major devaluation of the national currency.

The 100,000 dram bill came into circulation on August 24. Before that, a 50,000 dram bill was Armenia's largest banknote.

Abrahamian said the new banknote will make up only 3 percent of the cash circulating on the market and "cannot have a significant impact" on the economy in terms of the value of the national currency or any inflation risks.

Economist Vahagn Khachatrian, of the opposition Armenian National Congress, regards the move as a sign of a possible depreciation of the Armenian currency.

He told RFE/RL that, "It is an accepted practice in all countries that banknotes of a higher nominal value are printed when devaluation takes place."