Armenian monetary authorities have thrown in the towel after a seemingly protracted (and indisputably costly) fight to insulate their currency from the global and regional economic slowdown.
It was clear to anyone scrambling to get their hands on U.S. dollars in the Armenian capital last week (and as our Armenian correspondent reported
, there were many) that the move was only a matter of time.IMF types say
they're happy, too.
"Armenia has been negatively affected by the global economic and financial crisis after many years of strong economic performance," International Monetary Fund resident representative Nienke Oomes told a news conference.
Oomes noted falling exports and a slowdown in remittances, and said Armenia was feeling the impact of its much larger neighbour Russia sliding into its first recession in 10 years.
"We are very happy with the decision of the central bank," Oomes said. "We believe the exchange rate should be floating. The central bank should not intervene very much."
Among the unintended beneficiaries as the dram comes back down to earth, you can count the families of Armenian nationals who work abroad (particularly Russia). Such remittances
represented about 13.5 percent of Armenian GDP in 2007, according to the World Bank.
Assuming, that is, they are lucky enough still to be working.
-- Andy Heil