AMD - Armenian Dram

Characteristics of the Armenian Dram

The Armenian Dram is the official currency unit of Armenia, issued and regulated by the Central Bank of Armenia. One Dram is subdivided into 100 luma. The Dram plays an important role in daily transactions and the country's economy.

The word “Dram” means “money”, originating from the Greek word “drachma” and the Arabic word “dirham.” It also shares its name with the British unit of weight measurement, “dram.”

The coins and banknotes of the Armenian Dram often feature national symbols, historical figures, and cultural motifs. The designs have evolved, with recent issues showcasing modern security features, including National Gallery and History Museum of Armenia (֏50), Mount Ararat and Zvartnots Cathedral (֏100), Temple of Garni (֏5000), etc.

The history of the Armenian Dram

The earliest use of the term “dram” for currency dates back to the period between 1199 and 1375 when silver coins, known as dram or tram, were issued. 

During the era of Russian Armenia, the Imperial ruble was introduced, which was later adapted by the Soviet Union and the Commonwealth of Independent States (CIS) as their currency.

Following Armenia's declaration of independence on 21 September 1991, the Central Bank of Armenia was established on 27 March 1993 and was tasked with issuing the country’s national currency. Initially, Armenia participated in the CIS Rouble Zone, a common currency system among former Soviet republics. 

However, the Rouble Zone dissolved due to economic instability, particularly after Russia's unilateral monetary reform in 1993. This forced Armenia, along with other CIS nations, to introduce its own currency. Armenia officially launched the dram on 22 November 1993, becoming one of the last former Soviet states to do so.

After its introduction, the Armenian Dram witnessed significant fluctuations, especially in the early years when Armenia’s economy faced multiple challenges, including high inflation and political unrest. To stabilize the currency, the Central Bank of Armenia implemented numerous measures regarding monetary reforms and monetary policies. 

Armenian Dram denominations

Currently, the Armenian dram is available in various denominations, including both coins and banknotes.

Armenian Dram coins

Aluminum coins were first introduced in 1994 with denominations of 10, 20, and 50 luma, along with 1, 3, 5, and 10 dram. All coins were engraved with the issuance year of 1994. 

In 2003 and 2004, a second series of coins was released, featuring denominations of 10, 20, 50, 100, 200, and 500 dram, replacing the initial series. These coins were also engraved with the issuance year of either 2003 or 2004. 

The composition of Armenian coins has undergone some changes, now including materials like aluminum, copper-plated steel, brass-plated steel, and nickel-plated steel. On the obverse side of the coins, you'll find the Armenian coat of arms, while the reverse features the coin's value, decorative elements, and the year it was minted. This design not only reflects national pride but also incorporates various materials to ensure durability and resistance to wear over time.

Armenian Dram banknotes

• First series (1993–1998): Armenian Dram banknotes were first issued in November 1993 with denominations of 10, 25, 50, 100, 200, 500 dram, followed by the introduction of 1000 and 5000 denominations. By 2005, the first series of banknotes issued was withdrawn from circulation.

• Second series (1998–2017): The second series of banknotes was issued between 1998 and 2017. Banknotes with denominations of ֏50, ֏100, and ֏500 were rarely in circulation, as coins of the same values (֏50, ֏100, and ֏500) were more commonly used instead.

• Third series (2018–present): The third series of banknotes has been issued from 2018 to the present, with similar denominations to the previous versions. A new 2,000 dram banknote was introduced, and the 50,000 dram note was reissued. However, the 50, 100, 500, and 100,000 dram notes were discontinued in this release. 

Armenian Dram exchange rate

The modern Armenian Dram officially came into effect on November 22, 1993, with an exchange rate of 200 rubles to 1 dram (equivalent to 1 US dollar = 404 drams).

Determinants of the Armenian Dram's Value

The value of the Armenian Dram (AMD) is shaped by various economic and financial factors, including:

• Global Economic Landscape: The condition of the global economy can heavily influence the Dram's value. Economic troubles among Armenia’s main trading partners can decrease export demand, which may lead to a depreciation of the AMD.

• Monetary Policies by the Government: The Armenian government and the Central Bank are essential in maintaining the stability of the Dram's value. They may adopt fiscal policies or directly intervene in the foreign exchange market to ensure this stability. 

• International Gold Prices: The price of gold globally directly affects many national currencies, including the Armenian Dram (AMD). An increase in gold prices typically boosts the value of the AMD. In response, the Central Bank may sell Dram to ensure exchange rate stability and maintain the competitiveness of local exporters.

• Central Bank Interest Rates: Higher interest rates can lead to a stronger AMD, while lower rates may contribute to its decline.

• Trends in Cryptocurrency: While no formal statistics exist connecting Bitcoin prices to the Dram, the growing popularity of cryptocurrencies can indirectly influence exchange rates through increased capital flows into the crypto market.

These elements collectively shape the value of the AMD, resulting in a fluctuating economic environment. For the latest exchange rates and comprehensive details, various currency conversion tools can be consulted.