Armenian Central Bank leaves refinancing rate at 10.25%

 

According to the source, the CB's rate on Lombard REPOs and the deposit rate were left unchanged too  -  11.75% and 8.75%, respectively. 

 

According to the Central Bank, inflation in the consumer market of Armenia totaled 0.1% in August (versus 0.7% in Aug 2014). Eventually, the inflation slackened to 3.6 as of late August.  There is still slow upward trend in the global economy and deflation in the international commodity markets.  In this light, the Armenian Central Bank Council anticipates no influence on inflation from the external sector within the coming months. 

 

According to the Central Bank, in Q2 the economic activity rate was higher than anticipated due to supply factors. The stimulating fiscal policy helped certainly restore the domestic demand and partially 

neutralize deflation environment. As volatility grows in the world financial and foreign exchange markets, inflation expectations are relatively high. In this light, the CB considers it unreasonable to maintain the fiscal terms.  Due to it, by the end of the year, the 12-month inflation will decrease to the minimum permissible limit.  Such fiscal policy will allow not only reducing the inflation expectations, but also suspending them within the near future to achieve the mid-term target.

 

To recall, on Augu 11, the Central Bank of Armenia reduced the refinancing rate by 0.25pp from 10.5% to 10.25% at its August 11 meeting, the press- office of the Central Bank told ArmInfo.  According to the source, the CB's rate on Lombard REPOs was reduced from 14.5% to 11.75%, while the deposit rate was reduced from 9% to 8.75%.  At the June 24 session, the Board of the Central Bank of Armenia took a decision to retain the refinancing rate at 10.5%.  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%. 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%. Earlier, 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%.