Yerevan /Mediamax/. Toughening of sanctions against violators of law on “Administrative infringement of the law” and on “Currency regulation and currency control” aim at fighting dollarization and increasing demand for AMD, Chairman of Armenian CB Artur Javadyan stated.

Mediamax reports that Artur Javadyan presented details of legislative changes at a news conference in Yerevan today. “It was banned to pay in foreign currency for provision of any services, fulfillment of any work or purchase of goods in Armenia before as well. The changes touched upon punishing and preventive measures”, Artur Javadyan stated.

According to the changes in the law on “Currency regulation and currency control”, which came into effect on March 27, 2009, when violation of legislation is revealed for the first time, the subjects are warned, the second time they are fined for a sum, equivalent to 2000-fold minimal salary volume (instead of previous 100-fold volume) with interruption of the license for the term of up to a year. If violation is revealed for the third time, the subject is fined for a sum, equivalent to 4000-fold of minimal salary volume (instead of previous 200-fold volume), and the license is recalled. Sanctions also influence importers and exporters.

According to Artur Javadyan, the level of dollarization in Armenia as to banking liabilities makes 73%. “The high level of dollarization leads to the fact that any fluctuation in the currency market affects the economy of the country”, Artur Javadyan stated.

He informed that as a result of the formed devaluation expectations and conversion of deposits, the correlation of AMD deposits to deposits in foreign currency made 30% to 70% in late February, and on the day of return to floating national currency exchange rate policy, the losses of banks made 4.7bln AMD. “The profit of the banking system in 2008 made 27bln AMD, and, taking into account the fact, that further devaluation of AMD is not expected, banks will not experience such losses any longer”, Artur Javadyan stated.