People arriving in a country create demand for its currency, because they have to convert savings and income into it to live there. Armenia is a recent and well documented case. After February 2022 it received an inflow of foreign nationals, businesses and foreign exchange from Russia, followed from 2023 by ethnic Armenian refugees, and real gross domestic product grew by an average of 8.9 per cent a year across 2022 to 2024. The International Monetary Fund lists greater demand for dram from foreign nationals who relocated to Armenia among the exceptional factors present since the start of the war in Ukraine, and reads the dram's later relative stability as likely signalling their normalisation.
Migration and currencies are normally discussed one way round. People leave, they earn abroad, and they send money home, which is why the corridor exists at all. Armenia after February 2022 is the case where the arrow reversed, and it is unusually well documented because the International Monetary Fund listed the currency channel in its own assessment.
Key Takeaways
- Arriving people are buyers of the local currency, because living somewhere requires converting into its money.
- Armenia received foreign exchange, migrants and businesses from Russia after February 2022, and ethnic Armenian refugees from 2023.
- Real output grew by an average of 8.9 per cent a year over 2022 to 2024, and the working-age population rose.
- The Fund lists demand for dram from relocated foreign nationals among the exceptional factors present since the start of the war.
- The central bank's response was to buy foreign exchange when the dram was under upward pressure, not to resist the move directly.
Why arriving migration creates currency demand
Because somebody who moves has to buy the place they have moved to.
A migrant worker sending money home converts the country they are in into the country they came from. Someone relocating does the opposite and does it in bulk: savings held in one currency become rent, deposits and wages in another, and a business that moves converts its working capital along with its payroll. Each of those is a purchase of the local unit.
Ordinary migration is too small and too gradual for this to matter to an exchange rate. What makes it visible is concentration. When a large number of arrivals convert over a short window, and when businesses and their balances come with them, the flow stops being absorbed by normal trading and starts setting the price.
That is the difference between the usual transfer corridor, where the money moves and the people stay, and this case, where both moved together and in the same direction.
What arrived in Armenia
Three things at once, and the Fund separates them.
The first was capital and labour from Russia after the start of the war in Ukraine in February 2022. The Fund's account is of inflows of foreign exchange, migrants and businesses, and it credits them with growth well above trend: real gross domestic product grew by an average of 8.9 per cent a year across 2022 to 2024.
The second was an inflow of ethnic Armenian refugees beginning in 2023.
The third is easy to overlook and belongs on the list. The Fund records greater use of the rouble and the dram, in place of the US dollar, for trade invoicing with Russia, including for the payment of gas imports. A currency that starts being used to settle trade that previously settled in dollars acquires demand that has nothing to do with anybody moving anywhere.
Set against a country that the same report describes as facing long-term demographic headwinds, with a population set to decline and age, the effect on the labour force was the opposite of the trend: the Fund records the working-age population as having been boosted by both the refugees and the immigrants from Russia.
How the currency effect was recorded
By naming it, and by dating its unwinding.
This is the harder half of any claim of this kind. An exchange rate moves for many reasons at once and attributing a move to migration is usually an inference. The Fund's external sector assessment does something more useful: it lists the exceptional factors present since the start of the war, and it identifies the dram's later relative stability as likely signalling their normalisation. That is a narrower statement than a cause, and it is the one this guide relies on.
The two factors it lists are greater demand for dram from foreign nationals who relocated to Armenia, and the invoicing shift described above. On the Fund's models the currency was assessed as modestly overvalued, with the current account approach giving a real effective exchange rate gap of about 2.4 per cent and the direct real exchange rate model about 3.8 per cent.
The property market carries the clearer record. The Fund dates the housing effect to the same window, describing prices as having risen significantly through 2022 to 2024 in conjunction with the arrival of Russian migrants and, from 2023, ethnic Armenian refugees. It then gives the turn precisely: the average square metre price of a Yerevan apartment contracted in July 2025, after fifty consecutive months of year-on-year growth.
| Channel | What the Fund records |
|---|---|
| Output | Average real growth of 8.9 per cent a year, 2022 to 2024 |
| Labour force | Working-age population boosted by refugees and immigrants from Russia |
| Currency demand | Listed among the exceptional factors present since the war |
| Invoicing | Rouble and dram displacing the US dollar in trade with Russia |
| Housing | Yerevan prices up 2022 to 2024, first contraction July 2025 after fifty months |
The central bank's response
It bought the pressure rather than fought it.
The Fund's informational annex sets out the arrangement, and it is the source for everything in this section. It records a de jure free floating arrangement in which the Central Bank of Armenia intervenes to smooth excessive exchange rate volatility, and it gives the definition rather than leaving the term open: short-term, high-frequency movements caused by speculative or trend-following elements rather than by underlying macroeconomic fundamentals. It also records that the bank opportunistically purchases foreign exchange when the dram is facing appreciation pressures, to help gradually build reserves and maintain adequate cover.
That second sentence is the response to an inflow. Buying foreign currency into reserves absorbs the demand for local currency without announcing a level and without committing the bank to defending one. The same annex classifies the de facto arrangement as stabilised, records the rate as having appreciated on account of the large capital inflows of 2022 and 2023 and remained higher since, and describes the bank as intervening anonymously mainly via auctions of foreign exchange, or openly in the interbank market, or through the stock exchange.
One administrative detail sits in the same annex and is worth recording for what it is. Effective 1 March 2022, the calculation methodology for the official exchange rates the bank publishes was changed, so that the average rate of the dram against the US dollar is calculated as an arithmetic average of the volume-weighted average of US dollars sold and drams bought. The annex gives the date and the method and no reason for either, so the timing is noted here and not explained: a change of definition and a change in the flows being measured fell in the same season, and nothing in the source connects them.
What this means for the pair
That the dram's own side of the Australian dollar to dram pair has spent several years responding to something that has no equivalent on the Australian side.
An appreciation driven by arrivals is not the same thing as one driven by exports or by interest rates, and it does not unwind on the same schedule. The Fund treats it as a condition to be tracked rather than a trend, and its reading is that the exceptional factors have been normalising, which is what it takes the dram's relative stability to signal. A reader watching this pair is watching a currency whose recent history is a migration history.
Where to look next
when remittances are the economy covers the ordinary direction of travel, where the money moves and the people stay. For the live figures, see the AUD to AMD page.
Sources
International Monetary Fund, Republic of Armenia: 2025 Article IV Consultation and Sixth Review Under the Stand-By Arrangement, Country Report No. 25/323 - inflows of foreign exchange, migrants and businesses from Russia, average real growth of 8.9 per cent a year across 2022 to 2024, the inflow of ethnic Armenian refugees from 2023, the working-age population boosted by both groups against long-term demographic headwinds, the two exceptional factors listed in the external sector assessment and the reading of the dram's later stability as signalling their normalisation, the real effective exchange rate gaps of 2.4 and 3.8 per cent, and the housing box recording Yerevan prices rising through 2022 to 2024 with the average square metre price contracting in July 2025 after fifty months of growth
International Monetary Fund, Republic of Armenia: Staff Report for the 2025 Article IV Consultation, Informational Annex, Country Report Volume 2025 Issue 323 - the de jure free floating arrangement, the definition of excessive volatility as short-term high-frequency movements caused by speculative or trend-following elements, the opportunistic purchases of foreign exchange under appreciation pressure, the de facto stabilised classification, the intervention channels of anonymous auctions, the interbank market and the stock exchange, and the change of official rate methodology effective 1 March 2022
Central Bank of Armenia, Foreign Exchange Policy - the foreign exchange regulation framework, under which sales of goods and property, the rendering of services, wages and other payments connected with labour relations, and property appraisal and use are quoted in Armenian currency, and payments between residents are made in it
General information about migration flows and exchange rate arrangements. Not financial advice, and not a recommendation of any product or institution. Reviewed by the Tradergy editorial team, September 2026.
Common questions
Why would people arriving in a country push its currency up?
Because living somewhere requires its money. Someone who moves has to convert savings, income earned abroad or a business's working capital into the local unit to pay rent, wages and suppliers, and that conversion is a purchase of the local currency. Where enough people do it at once, the demand is large enough to show up in the exchange rate rather than being absorbed by ordinary trading.
What happened in Armenia after February 2022?
On the International Monetary Fund's account the country received inflows of foreign exchange, migrants and businesses from Russia, and real gross domestic product grew by an average of 8.9 per cent a year over 2022 to 2024. From 2023 an inflow of ethnic Armenian refugees followed. The Fund records the working-age population as having been boosted by both groups.
What exactly does the International Monetary Fund say about migration and the dram?
Less than a causal attribution, and it is worth quoting carefully. Its external sector assessment lists two exceptional factors present since the beginning of the war in Ukraine: greater demand for dram from foreign nationals who relocated to Armenia, and greater use of the rouble and the dram instead of the US dollar for trade invoicing with Russia, including for gas imports. It then reads the dram's relative stability as likely signalling the normalisation of those factors. That is a list of conditions and a reading of their unwinding, not a statement that one of them set the currency's level.
What did the central bank do about it?
It bought foreign currency. The Fund's informational annex records a de jure free floating arrangement in which the Central Bank of Armenia intervenes to smooth excessive volatility, defined there as short-term, high-frequency movements driven by speculative or trend-following elements rather than by fundamentals, and in which it opportunistically purchases foreign exchange when the dram faces appreciation pressures in order to build reserves. The same annex classifies the de facto arrangement as stabilised.
Where else did the inflow show up?
In housing, and it is dated precisely. The Fund records residential prices in Yerevan rising through 2022 to 2024 alongside the arrival of Russian migrants and, from 2023, ethnic Armenian refugees, with the average square metre price of a Yerevan apartment contracting in July 2025 after fifty consecutive months of year-on-year growth. An arrival effect on an exchange rate is hard to isolate; the same effect on a property market leaves a clearer record.