ArmInfo.The Central Bank of Armenia lowered the refinancing rate by 0.25 percentage points from 6% to 5.75%. According to the press service of the Central Bank of Armenia, this decision was made at a meeting of the Board of the Central Bank on January 29. It is worth recalling that the refinancing rate has been kept at 6% since February 2017.
The Council of the Central Bank states that at the end of 2018 economic activity continued to weaken, and therefore, economic growth is expected to be around 5%. The main factors behind the decline in gross demand were the restraining process of fiscal policy and the slowdown in the growth of private spending. The Central Bank Board believes that low inflation is partly structural in nature, due to the long-term changes in economic and public policy, which also contributes to maintaining the purchasing power of income and securing inflation expectations. Based on this, the CB Board found it expedient to revise the refinancing rate downwards, thereby giving a more stimulating effect to the monetary conditions. To note, the previous meeting of the Central Bank Council at the refinancing rate was held on December 25, 2018, when the level was kept at 6%, along with what the lombard repo rates remained unchanged - 7.5% and deposits attracted from banks - 4.5%. The refinancing rate was revised in 2017 on February 14 - a decline from 6.25% to 6%, in parallel with that, the rates on Lombard repo decreased from 7.75% to 7.5% and deposits attracted from banks - from 4.75% to 4.5%, while maintaining these levels to this day.
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