Russia could demand Armenia joins ruble zone

Former Prime Minister of Armenia Grant Bagratian thinks that in return for assisting Armenia Russia could demand that it joins the ruble zone.

The former PM suggests that the current problems in Armenia are not only due to the world economic crisis but the state policy of strengthening of local currency, the Drum, against other currencies. This is in the interests of importers who are in close alliance with the authorities. As a consequence of this policy export has practically stopped.

Russia has to protect its interests and will demand that Armenia enter the ruble zone. Russian Minister of Finance Aleksey Kudrin stated on January 22 that Armenia has asked Russia to issue stabilization credit to assist the country during the global crisis. However neither the amount nor conditions of this were specified.

Chairman of Armenia’s central bank Artur Javadian stated on January 23 that in the near future an Armenian delegation will arrive in Moscow to receive this stabilization credit. However Javadian also did not specify the amount or terms of the credit. Armenia is negotiating further crisis-combating credits with the World Bank, Asian Development Bank and EBRD.