Tuesday, December 10 2019 18:51
Karine Melikyan

Central Bank of Armenia keeps refinancing rate at 5.5%

Central Bank of Armenia keeps refinancing rate at 5.5%

ArmInfo.The central bank kept the refinancing rate at 5.5%. As the Central Bank of Armenia press service told ArmInfo, this decision was made on December 10 at a  meeting of the Central Bank Council.

The Central Bank said that the uncertainty of the development of the  world economy has slightly decreased, but nonetheless, its low growth  rates remain. This is reflected in the persistence of weak global  demand and a low inflation environment in international commodity  markets. The Central Bank Council believes that a significant impact  from the external sector on the inflationary environment is not  expected.  The CB Board notes that in the III quarter economic  activity in Armenia exceeded the forecasted level, and this trend  will continue in the IV quarter, and the service sector will act as  the main driver. Domestic demand also remains high due to growth in  private consumption, which continues to be promoted by the  stimulating effect of monetary conditions. At the same time, despite  the fact that since the beginning of the year the influence of fiscal  policy on gross demand is estimated to be restraining, nevertheless,  in the fourth quarter and next year it is expected to be stimulating.

The Central Bank Board, based on the foregoing and giving preference  to a gradual recovery in inflation, considered it appropriate to  maintain the refinancing rate at the same level. The Council of the  Central Bank believes that in the context of projected macroeconomic  development, it will be necessary to maintain the stimulating effect  of monetary conditions in the medium term in order to bring inflation  to the target threshold. As a result, inflation is expected to remain  low in the coming months, with a gradual return to the target  threshold in the medium term.

The Central Bank Council emphasizes that the risks of deviation of  inflation from the forecast threshold are generally balanced, but the  Central Bank is ready to react accordingly to ensure price stability  in the medium term.

It should be noted that the Central Bank of the Republic of Armenia  reduced the refinancing rate from 5.75% to 5.5% on September 10,  2019, in accordance with which the rates on Lombard repo were reduced  by 0.25 percentage points - from 7.25% to 7%, and deposits from banks  - from 4.25% to 4%. Prior to this, a decrease in the refinancing rate  took place at the end of January 2019 - from 6% to 5.75%, in  connection with which the rates on pawnshop repo decreased the same  way - from 7.5% to 7.25%, and on deposits attracted from banks - from  4.5% to 4.25%. 

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10 billion

Volume of T-bills for placement

200 million

Volume of submitted competitive applications

200 million

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200 million

Yield at cut-off price

 5.8314%

Maximum yield

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Мinimum yield

 5.8314%

Weighted average yield

 5.8314%

Number of participants

2

The maturity date of T-bills

03.02.2020

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