CB retains refinancing rate unchanged at 10.5%

At the May 12 session, the Board of the Central Bank of Armenia (CBA) took a decision to retain the refinancing rate at 10.5%, the CB press office has told ArmInfo. According to the CB, April 2015 saw 0.4% deflation against the 0.5% deflation in April 2014. The annual inflation reached 4.8%. 

 

The CB believes that within the next few months one should expect a deflationary pressure from the external sector amid slow growth of global economy and reduction in prices on the international raw 

material and commodity markets. 

 

The source says that in Q1 2015 the economic activity in Armenia grew by 2.5% due to the agriculture growth, which exceeded the expectations, and the construction decline, which was weaker than 

expected.  Along the growth in agriculture, the CB expects a more intensive seasonal drop in food prices, but the effect from the deflation on the food market will be neutral amid possible rise in 

electric power tariffs. As a result, due to the current refinancing rate, the annual inflation will remain close to the target till late 2015 and will meet the target within the mid-term outlook. The CB will further adjust the monetary policy with due regard for the economy trends. 

 

To recall, at the March 24 session, the Board of the Central Bank of Armenia (CBA) took a decision to retain the refinancing rate at 10.5% and to reduce the lombard repo rate from 13.5% to 12%. Previously, on March 12, the CB reduced the lombard repo rate by one pct point from 14.5% to 13.5%. On Feb 10, 2015, the CB raised the refinancing rate from 9.5% to 10.5%, at the same time reducing the lombard repo rate from 17% to 14.5% and raising the deposit rate from 5.25% to 9%.  Previously the refinancing rate was raised on 22 Jan 2015 - from 8.5% to 9.5%. On 23 Dec 2014, it was increased from 6.75% to 8.5%. On 3 Dec 2014, the CBA raised the lombard repo rate from 10.25% to 21%, on Dec 23 it reduced the rate to 20%, and on Jan 22, 2015, the rate was decreased to 17%.