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Armenian currency to end 2014 lower by 15% as negative Russian impac

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  • Armenian currency to end 2014 lower by 15% as negative Russian impac

    International Business Times UK-
    Dec 31, 2014

    Armenian currency to end 2014 lower by 15% as negative Russian impacts
    remain; IMF grants $17m

    By Boby Michael
    December 31, 2014 06:57 GMT


    The International Monetary Fund (IMF) on 30 December approved aid
    worth $17m (£10.9m) for Armenia, another victim of the currency slide
    and economic crisis alike its neighbour Russia.

    The IMF said Armenia's growth remained subdued in 2014 and recovery is
    going to be marginal next year.

    The central bank of Armenia had hiked the benchmark interest rate
    sharply to 8.5% from 6.75% on 23 December, a week after its
    counterpart in Russia raised the rate by 650 basis points to counter
    the plunge in the rouble.

    The Armenian dram plummeted more than 22% from its October close
    tracking the rouble slide, but the Russian rate hike helped the
    currency rebound from the record lows towards the end of the year.

    Despite the Armenian rate hike, the dram has shed a part of the
    immediate gains following the Russian rate hike on 16 December.

    The USD/AMD pair has held a narrow range of 395-415 in the first 10
    months of the year, but the sharp jump after that took it to as high
    as 527 before easing to 450 by 22 December.

    On the last day of the year, a day after IMF announced the aid, it was
    trading at 475, at which the dram was down more than 15% year-on-year.

    The IMF aid announced on Tuesday was part of a three-year program
    worth $119.1m announced in March this year and so far the disbursement
    of funds has totalled $34m.

    The IMF said Armenia faces a period of slower growth unless decisive
    actions are taken.

    "Going forward, projected growth rates will not be sufficient to
    generate sufficient jobs and stem emigration. Sluggish investment in
    recent years, a still-weak business climate, and the absence of strong
    growth drivers constrain the capacity of the economy to generate
    sufficient jobs to stem emigration and reduce poverty," the Fund
    added.

    http://www.ibtimes.co.uk/armenian-currency-end-2014-lower-by-15-negative-russian-impacts-remain-imf-grants-17m-1481391

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