Where Does Armenian Money Go?

RA Central Bank former president Bagrat Asatryan said today that the country’s monetary base, manifested through the national currency, began to diminish near the end of 2008. According to Asatryan, that process continues till today.

There are two factors for why there’s a sharp decline in demand for money, one of which is political, said Asatryan.

“A distrust of authorities is growing among the public and consequently, toward the national currency,” explained Asatryan. According to the former Central Bank president, the second factor is money flowing out of the country. As an example, Asatryan named Georgia, where there are more favourable conditions for doing business. In his observation, lately, a flow of Armenian business to Georgia is noticeable.

Asatryan also said that during the first 3 months of 2010, the financial base (expressed by dram) has decreased by 45 billion AMD. In 2008, the cash (on hand) base in the country was 344 billion dram, while in 2009, that amount was 320 billion AMD. According to data as of March 25, 2010, the base has diminished and now comprises 274 billion AMD.