Monday, June 10 2013 14:09

Central Bank of Armenia to be forced to tighten monetary policy


ArmInfo. In the context of growth of tariffs for gas and electric power Central Bank of Armenia to be forced to tighten monetary policy, Central Bank (CBA) Chairman Arthur Javadyan said during Monday's National Assembly discussions.

The increase in the prices of natural gas and electricity and the recent hailstorm will create an additional 2-2.5-percent inflation in Armenia, he said and added that they opt for a tough monetary policy under these conditions, but it is still too early to say whether the refinancing interest rate will increase or not. The main challenge of the CPA is the maintenance of price stability; but if this conflicts with other challenges, they need to choose the main challenge, Javadyan said and added that they are not pursuing a policy of a strong Armenian national currency (dram), and they intervene in the exchange rates solely in the case of sharp fluctuations.

To note, according to Armenia's Central Bank, the refinancing rate was decreased from 8,5% to 8% in April 2011 and has been preserved since then. However, Central Bank does not rule out that in the conditions of the inflation risks display linked with bad weather conditions and their affecting agriculture, as well as growth of gas and electric power tariffs, the interest rates will be corrected.
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