ArmInfo. The Central Bank of Armenia preferred not to change the refinancing rate yet, keeping it at 6%. As the press service of the Central Bank of Armenia told ArmInfo, this decision was made on February 13 at a meeting of the Council of the Central Bank along with this, at the same level, the rate for lombard repo was kept at 7.5%, and deposits attracted from banks - 4.5%.
According to the source, in the external market, development basically reflects the continuing trends in the accelerating growth of the world economy and the continuing inflation environment in some international commodity markets. In this context, the CB Board is still expecting that, in parallel with the increase in external demand, a weak inflationary influence will remain. According to the Central Bank estimates, in the fourth quarter of 2017 there was a fairly high economic activity, mainly due to high growth rates in the services sector and the industrial sector. This was accompanied by an acceleration in the growth of domestic private demand, which continues to be supported by an expanded monetary policy and a relatively high growth in lending to the economy from the financial system. But in order to ensure a stable recovery of demand, monetary stimulus is still needed, especially since the additional inflationary expectations have significantly weakened.
Considering the above mentioned, the CB Board considered it expedient to maintain the current level of monetary and credit conditions. At the same time, the CB Board believes that in the context of the forecasted development in the medium term, the stimulating monetary conditions will need to be gradually neutralized to ensure inflation at the target level. As a result, a gradual increase in inflation is expected with a fluctuation in the permissible range and stabilization in the future at the target threshold. In January 2018, inflation was formed at the level of 2.7%, and the same level of annual inflation (January 2018 to January 2017), and the direct and indirect impact from tax and customs changes was within the CB estimates.
The Central Bank, depending on the prospects for economic development and the risks of deviating inflation from the recovery path, will adjust the monetary and credit conditions accordingly.
In 2017, after the February fall from 6.25% to 6%, at the subsequent meetings (in March, May, June, August, September and November-December), the Central Bank left the refinancing rate unchanged. At the same time, lowered in February rates on pawn-shop repo rates - from 7.75% to 7.5% and deposits attracted from banks - from 4.75% to 4.5%, were subsequently not revised. Prior to this, at the end of 2016, on December 27, the refinancing rate was reduced from 6.5% to 6.25%, along with a decrease in interest rates on lombard repo - from 8% to 7.75% and deposits attracted from banks - from 5% to 4.75%. At the end of 2015, on December 22, the refinancing rate was reduced from 9.75% to 8.75%, at the same time, the rates for pawn-office repo decreased from 11.75% to 11.25%, and on attracted deposits from 8.75% % to 8.25%.