Dollar-denominated remittances of migrant workers in Russia are still in decline in Armenia. While workers are still able to send home broadly the same amounts in rubles, that money can buy less than it could a year ago, because of the ruble’s plunge against the US dollar.

In Armenia, dollar exchange rate is an important driving force not only for imported goods, but also for local producers of consumer goods, whose gas invoices are tied to the dollar exchange rate.

According to the statistical data by the Central Bank of Armenia, non-commercial remittances from Russia declined month on month in the first 4 months of 2015, as compared to 2014, the monthly gap lingering around $60 mln. In June, however, it narrowed to $37 mln (85,8 mln in June 2015 against 122,2 mln in June 2014).

Still, the Central Bank of Armenia expects inbound remittances from Russia to shrink in 2015 by 25% in dollar terms.

Because of this, accompanied by a weaker estimate of domestic investment activity, CBA expects gross private sector expenses to decline in 2015 by around 2,1%, and those of the household by 1,6%.

This, in turn, is supposed to leash the inflation by a factor of 1,6 – 1,8 percentage points before the end of 2015.

Ruble exchange rate is heading downwards not only to USD, but also to the Armenian dram, from 12 AMD in late June 2014 to a mere 7,01 today (as per CBA exchange rates).

This does not discourage currency exchange booths from buying and selling ruble. Quite the opposite, according to the CBA data, month on month comparison of the first 6 months of 2015 against 2014 finds a steady growth in ruble turnover (in the range of 25-30%, with the exception of May).