Tuesday, August 9 2011 20:04
Central Bank retains refinancing rate at 8.5%
ArmInfo. At today's sitting the Board of the Central Bank of Armenia (CBA) made a decision to retain the refinancing rate at the same level - 8.5%, the CBA press service told ArmInfo. According to the source, in July 2011 3% deflation was fixed in the country, and the annual inflation dropped by 2.2 pct points to 6.3%.
The CBA Board states dampening of the general inflationary environment, which is conditioned by both internal and external macroeconomic processes. According to the Board's forecasts, the imported inflation will keep on decreasing. Nevertheless, the debt problems in the world economy and the instability of international stock markets increases the uncertainty of the forecasts about macroeconomic policies of developed countries. The Board unanimously says that the slow recovery of the domestic demand, restrained fiscal policy, as well as the policy of toughening the monetary conditions will also contribute to long-lasting reduction of the inflation rates.
The CBA Board considers that the dampening of the inflationary environment both inside the economy and in the international markets of raw materials and commodities, as well as the more favorable (than in 2010) situation in the sphere of agriculture allow stating that the inflation will keep on declining rapidly and will approach the lowest bar of the targeted index - 4% (+/-1.5%) by late 2011. However, notwithstanding the inflationary trends and taking into account the problems in the world economy, the CBA Board does not yet undertake dampening of the monetary conditions. To recall, the CBA Board raised the refinancing rate from 7% to 7.25% on 11 May 2010 and retained it till 8 Feb 2011. On 8 Feb 2011 the CBA Board raised the refinancing rate to 7.75%, on March 4 - to 8.25%, and on April 12 - to 8.5%.
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