The Armenian Dram alone has depreciated vs. the Dollar 9.26% YoY.
It's gonna be steeper than -7.3%
>-10% is my estimate.
It's gonna be steeper than -7.3%
>-10% is my estimate.
https://twitter.com/avgevorkyan/status/1338598617276436481
The Dram is at its all-time low for the past 5 years due to:
1. The banks losing investment/loans in Artsakh.
2. Loss of confidence in the country, panic.
3. No tourism due to Covid.
1. The banks losing investment/loans in Artsakh.
2. Loss of confidence in the country, panic.
3. No tourism due to Covid.
Now watch out for non-performing loans after the Dram depreciation. Almost everyone gets paid in Dram, while many having loans in USD (more attractive due to lower interest rate.) They will need more Dram to pay the same USD loan which is going to lead to defaults.
522 is still not crazy depreciation which could lead to heavy inflation, but if you look at the historical chart of the past 5 years, 522 is significant.
After these tweets, I went to a financial news website out of curiosity, and look what I saw: "Head of Central Bank of Armenia warns that non-performing loans could reach up to 10%." [by year end]
(previously reported at 6.7%)
(previously reported at 6.7%)
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