Historical Sketch

Armenian statehood dates to antiquity. Weakened by warfare against central Asian tribes, Armenia fell under the suzerainty of its neighbours which culminated in the partition between Persia (eastern part) and Turkey (western part) of 1639. The eastern part got annexed to the Russian Empire until the mid-19th century. After the Russian Revolution of 1917, the territories of Transcaucasia proclaimed independence. There were rivalling movements for a united Transcaucasian state and separate governments in Armenia, Azerbaijan, and Georgia. In 1920, after the communist victory in the Russian civil war, Armenia aligned with Soviet Russia, and in 1922, Russia and the three states of Ukraine, Belarus, and Transcaucasia formed the Union of Soviet Socialist Republics (USSR). In the Soviet territorial reform of 1936, Transcaucasia was partitioned again, and Armenia became a separate Soviet republic. In 1991, Armenia withdrew from the USSR and declared independence. The Armenian government supported the secession of the Nagorno Karabakh region of Azerbaijan with its Armenian speaking majority and the subsequent proclamation of the "Republic of Artsakh". The secession was finally crushed by Azerbaijan in 2023.

Monetary History Overview

In February 1918, the Transcaucasian government began issuing paper money and thus decoupled the region from the rest of the Russian currency area. However, the 1st Transcaucasian Ruble was subject to an even stronger inflation as the issuance of paper money soon went out of control. The first Transcaucasian state collapsed at the end of 1918, and the individual states took over. The Armenian government began issuing its own paper money in mid-1919 replacing the Transcaucasian Ruble on par. The new Armenian Ruble was issued in such large quantities that the monetary economy almost collapsed. This continued even after the Bolshevik takeover in 1920. After the merger of Armenia, Azerbaijan and Georgia into the Transcaucasian Soviet Republic and the integration into the USSR, a currency reform was carried out in January 1923, which abolished the individual currencies of the three constituent states, creating the 2nd Transcaucasian Ruble. The conversion rates for the three currencies were different to take into account the economic situations. The Armenian Ruble had depreciated the against its Azerbaijani and Georgian counterparts, so the rate was lowest. The uncontrolled issuance of paper money, however, continued during the Soviet Transcaucasian period such that the Transcaucasian currency depreciated against the Russian currency. When the Soviet Union finally introduced a stable currency in January 1924, the Transcaucasian Ruble had depreciated by a factor of 250 against the currencies of Soviet Russia, for Armenia alone the factor amounted to 37'500. The Soviet currency reform in Transcaucasia was completed by mid-July 1924.

When Armenia regained independence in 1991, the country initially remained in the Ruble zone. For a certain time it pursued the idea of a monetary union under Russian leadership, which did not come forward and was finally abandoned end-1993. In April of the year, the Central Bank was established. But when Russia withdrew the Soviet banknotes from circulation in mid-1993, Armenia was not prepared to follow suit so that worthless Soviet paper money flew into the country. In October 1993, a commission was installed to organize the transition. End November, finally, the Armenian Dram was created as national currency. The transition from the Russian Ruble occurred with an almost 60% devaluation, and the exchange rate was floated immediately, causing another 80% decline within months. During 1994, the currency stabilized, and the exchange rate has remained more or less stable since then.

Armenia joined the International Monetary Fund (IMF) on 28.05.1992.

Currency Units Timeline

Currency Institutes Timeline

Monetary History Sources