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Dollar Disappearing Act In Yerevan

In a further sign of growing strain on official exchange rates for the Armenian dram, buying U.S. dollars was all but impossible the other day in the capital, Yerevan.

Critics accuse the Armenian government and central bank of aggressively tapping hard-currency reserves to prop up the dram, which has not eased against the dollar since the onset of the global financial crisis late last year. The authorities deny any heavy intervention on the currency market.

Many Armenians are unconvinced.

Dollar seekers were queued up outside banks and currency-exchange shops on February 27. And currency dealers told RFE/RL that banks had simply stopped selling the U.S. currency and residents were buying up dollars wherever they could.

A currency dealer at a supermarket in downtown Yerevan said "everyone wants dollars, but we aren't selling them." "It's a panic," he said. "I only have $125 in cash right now; I used to have $20,000 at this time of the day."

A branch manager at one of Armenia's largest banks, Ardshininvest, confirmed that "people are panicking." But he said the only restriction on dollar purchases at his bank was that customers couldn't buy large quantities of the U.S. currency.

A spokeswoman for the Central Bank of Armenia rejected any talk of a dollar crunch, although she conceded that currency sellers "catering to the shadow economy" or playing "speculative games" could be causing temporary shortages.

But bank clients told a different story.

"They say they don't have dollars," one shrugged simply.

-- Anush Martirosian

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