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YEREVAN. – The Armenian dram may drop against the US dollar by up to 15-16%, Mr Vilen Khachatryan, an economic expert, told the media Saturday in Yerevan.

The upward trend of the greenback against other currencies is lasting, he added.

At its latest policy meeting, the US Federal Reserve gave no timeline of raising federal funds rate, which has been much anticipated over the recent months. Raising it from close to zero will increase borrowing costs, attract yield-seeking investors and further increase demand for the U.S. currency.

The looming currency tumble may be mitigated by inbound dollar flows to the country in the coming months, so their sufficient levels are essential. Another fundamental is the policy response of the Central Bank, which may or may not choose to contain currency drop by means of its foreign reserves. But one can expect the dram to depreciate by anywhere between 40 and 80 per dollar (16-17%), he said.

 

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