On March 3, the dollar devalued 80 dram within the time span of an hour. At noon, the panic that would throw consumers into a whirlwind of uncertainty and confusion had blossomed.
What followed was a mad rush by many consumers to grocery stores where they purchased large quantities of basic foodstuffs like flour, sugar, and cooking oil—which had spontaneously increased 200 dram—out of sheer panic. By day’s end, store shelves were bare of essentials. Dollars were either in short supply or were completely unavailable.
In response to the depreciation, some businesses reacted to the point of desperation. The entire chain of Star Supermarkets closed entirely for two hours to adjust prices. Some stores closed altogether, like the newly opened Nike franchise on Hanrabedutyan Street, which removed merchandise from display windows and shut its doors for nearly a week. Consumer goods became more expensive because distributors were deliberately raising prices in expectation of further devaluation and increased short-term demand. At one point during the first week in March, one dollar bought 400 drams on the street.
The dollar-to-dram exchange rate had held steady at around 305 for a year. The Central Bank of Armenia repeatedly denied that it had fixed the rate. Despite the slight strengthening of the dollar during the last half of 2008, the dram’s worth would not drop.
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