To what extent is the reduction in cash flow related to changes in the exchange rate? – Alpha Economics

The amount of money transferred by individuals through banks continues to decrease. This is evidenced by the statistics of the Central Bank of Armenia.

The amount of money transferred to Armenia in 10 months of the current year was $1.03 billion, which was about 30% less year-over-year. Moreover, transfers from Russia continue to prevail, although transactions from this direction decreased. It is noteworthy that only in October did the inflow increase, compared to October last year.

As already mentioned, the volumes of transfers from Russia to Armenia are the highest. Transfers from the US come second. It should be noted that a similar picture was in 2023. It is also noteworthy that cash flows from Russia decreased by 0.5 billion dollars, while the US indicator slightly increased.

The reduction in cash flow, in fact, means the abolition of another external factor. Taking into account that this is not the only weakening factor, and that as a result of these factors the dram has been strengthening against foreign currencies for a long time, the weakening of the dram today may be a direct reflection of these processes. The factors are weakening, economic growth is slowing down, and the dram is losing its positions.

The situation is different in the case of the ruble; the main influence here is the sharp fall of the ruble, precisely in the Russian market. But, returning to the development of the Armenian economy, at least it can be noted that the preservation of these rates will lead to a certain inflation, first of all, in terms of imported goods.