Tuesday, August 13 2013 19:12

Armenia's Central Bank raises rate of refinancing from 8% to 8.5% to curb inflationary expectations and to cushion their impact on energy prices


ArmInfo. Armenia's Central Bank decided on Tuesday to raise the rate of refinancing from 8% to 8.5% with a view to curb inflationary expectations and to cushion their impact on energy prices.

The CB expects that this will help it to bring inflation back to the target level in the coming months.

In July 2013 inflation was 0.4% following rising energy costs against 1.5% deflation in July 2012. In Jan-June 2013 inflation was 8.5% (higher than targeted for the period) due to a rise in some service costs and hail-caused problems in agriculture.

The CB reports declining growth in the global economy and deflationary trends on commodity and food markets. So, there will be no additional external inflationary pressures in the coming months.

The CB has also raised the deposit rate from 6.5% to 7%, with the repo rate kept unchanged at 10%.

The last time the CB changed the rate of refinancing was Apr 2011, when the rate was reduced from 8.5% to 8%.
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