Haykakan Zhamanak: Armenian authorities made ‘verbal intervention’

Haykakan Zhamanak’ writes that an unprecedented event took place yesterday in Armenia’s currency market – the authorities of the country made a ‘verbal intervention’.

“The exchange rate at the moment depends not on the financial-economic and monetary-credit indices of the country, but on the expectations of market players. If the expectations are negative, then the currency may sharply depreciate regardless of financial and economic indices. A ‘verbal intervention’ is rarely made in such cases. 

For example, the chairman of the Central Bank says that what happened is only a result of speculations, while they have much money, the banking system is superstable, and the national currency will start to appreciate very soon. A ‘verbal intervention’ at the right moment can have the same impact on the market as injection of several dozen million dollars. Such a thing happened yesterday. The Armenian prime minister and the chairman of Central Bank of Armenia almost simultaneously issued statements in the afternoon. In fact, a ‘verbal intervention’ is just an assurance that, however, may have quite a positive effect under slightly different conditions. There were such conditions yesterday,” the paper writes.