Wednesday, February 9 2011 11:56
Central Bank of Armenia raises refinancing rate from 7.25% to 7.75%
ArmInfo. The Central Bank of Armenia has raised the refinancing rate by 0.5% to 7.75%. The CBA press service told ArmInfo that the CBA Board took the relevant decision at today's sitting.
According to the source, in January 2011 2.8% inflation was fixed in Armenia as compared with December 2010, and the annual inflation made up 10.6% due to the 8.8% growth in food commodity prices. The CBA Board thinks that the deepening of the inflationary environment will continue due to the high prices of food commodities and raw products in the international markets, which, in their turn, are conditioned by maintenance of tension and reduction of the aggregate supply of agricultural products.
Though the recovery of the total demand does not create additional inflationary pressures, nevertheless, the economic development tendencies, intensification of indirect impacts of the inflation of 2010, as well as intensification of inflationary expectations create new inflation risks, the CBA Board says.
Under these conditions, the CBA Board thinks that the path to reduction of inflationary risks is the toughening of the monetary conditions and changing the reserve requirements, moreover, the amendment on the latter was already introduced by the CBA Board several days ago. The Board thinks that the monetary conditions should be toughened gradually in compliance with the forecasted inflation, and promises to create premises for inflation reduction to the targeted limit by means of anti-inflation measures jointly with other state structures starting from the second half of 2011.
To recall, the CBA Board raised the refinancing rate from 7% to 7.25% on 11 May 2010 and has been maintaining it at this level up to today's increasing.
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