Tuesday, February 10 2015 18:17

Central Bank of Armenia raises refinancing rate from 9.5% to 10.5%


ArmInfo. The Central Bank of Armenia (CBA) has raised the refinancing
rate from 9.5% to 10.5%. The CBA press service has told ArmInfo that
the decision was taken at the CBA Council's session on Feb 10. The
refinancing rate was previously raised on January 22 from 8.5% to
9.5%, and on 23 December 2014 - from 6.75% to 8,5%.

The source says that the CBA has also reduced the Lombard repo rate
from 17% to 14.5%. On 3 Dec 2014 the CBA raised the Lombard repo rate
from 10.25% to 21%. On 23 Dec 2014 it reduced the rate to 20%, and on
22 Jan 2015 - to 17%.

The deposit rate has been increased from 5.25% to 9%. The previous
rate (5.25%) was fixed on November 24.

According to the CBA, in Jan 2015 inflation made up 2.5%, with the
12-month inflation reaching 4.3% (this index is close to the target).
The CBA Council believes that within the next few months the annual
inflation will grow to some extent if compared with the low index of
the same period in 2014. Afterwards, it will approach the target
level again.

The CBA Council has registered economic growth acceleration in the
foreign sector this year. This resulted in expectation of growing
rates and contributed to revaluation of the US dollar and reduction
in prices on international raw materials and food markets. This
enhanced the investment risks in the developing countries and
deepened the volatility on the forex markets of these markets.

The CBA thinks it expedient reducing the market short-term rates
along with neutralization of the consequences on the Armenian
financial and commodity markets from the impact of the abovementioned
tendencies, as well as from the regional geopolitical situation.
According to the CBA, this will stabilize the situation on the
financial market and secure the mid-term inflation index.