Wednesday, April 29 2020 15:11
Karine Melikyan

Central Bank of Armenia again lowered the refinancing rate by 0.25  percentage points - up to 5%

Central Bank of Armenia again lowered the refinancing rate by 0.25  percentage points - up to 5%

ArmInfo.The Central Bank of Armenia has once again reduced the refinancing rate by 0.25 percentage points to 5%. As the Central Bank of Armenia press service  told ArmInfo, this decision was made at the April meeting of the  Central Bank Board.

In accordance with this, rates on lombard repo were reduced by 0.25  percentage points from 6.75% to 6.5%, and on deposits from banks -  from 3.75% to 3.5%.

The CB Board states that the spread of coronavirus and preventive  measures in the field of healthcare have a significant negative  impact on the growth of the world economy, including the partner  countries of Armenia, and have increased the volatility of raw  materials and food prices. Despite the fact that due to the joint  efforts of the central banks of leading countries, the volatility of  financial markets has weakened, uncertainty and risks remain at a  high level. According to the Central Bank, all this will have a  deflationary effect on the Armenian economy.

As a result of the negative impact of coronavirus on the economy of  Armenia, in March 2020 compared with the same period last year, in  almost all fields of the economy, there was a decrease in economic  activity, which, according to the Central Bank, will accelerate in  the second quarter due to a decrease in both demand and supply . It  is estimated that weak gross demand will continue in the future, to  some extent mitigated by the stimulating effect of measures taken by  the government aimed at eliminating social and economic consequences.  At the same time, the uncertainties associated with the timing of  overcoming the crisis and economic recovery have increased to a  certain extent, only after reducing which it will be possible to  assess longer-term changes in the structure and prospects of the  Armenian economy.

The Central Bank Board, given the current and projected development  of the domestic and global economies, weakening demand, the existing  low inflation environment and stabilization of financial markets,  considers it expedient to strengthen the stimulating effect of  monetary conditions by another decrease in the refinancing rate by  another 0.25 percentage points. The Central Bank Board believes that  in this situation this stimulating effect should be maintained in the  medium term.

As a result, according to the basic scenario of the Central Bank,  inflation will remain low in the short term and will approach the  target threshold (4% +/- 1.5 - Ed. note) only at the end of the  forecast period. As of March 2020, inflation in the consumer market  of Armenia was recorded at 0.5% (against inflation 0.1% in March last  year), with annual deflation at 0.1%.

Currently, the uncertainty regarding the short-term and long-term  prospects of economic development is quite high, which the Central  Bank is also trying to take into account in its actions. At the same  time, according to the Central Bank, the risks of inflation deviation  from the predicted trajectory are more downward, which is due to both  external and internal factors. In case of any manifestation of risks,  the Central Bank is ready, if necessary, to adjust the policy  accordingly to ensure price stability in the medium term.

It should be noted that the previous decrease in the refinancing rate  by the Central Bank of Armenia dated March 17, 2020 - from 5.5% to  5.205%, and at the same time, rates on pawnshop repo were reduced  from 7% to 6.75%, and deposits from banks - from 4% to 3.75%. Another  decrease in the refinancing rate again by 0.25 percentage points  followed in late April. 


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Government Bonds

Issue volume

10 billion

Volume of T-bills for placement

200 million

Volume of submitted competitive applications

200 million

Volume of satisfied bids

200 million

Yield at cut-off price

 5.8314%

Maximum yield

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Мinimum yield

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Weighted average yield

 5.8314%

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2

The maturity date of T-bills

03.02.2020

ArmEx

 

СПРОС (Покупка)

USD

Средневзв. Цена

482,00

ПРЕДЛОЖЕНИЕ (Продажа)

  USD

Средневзв. Цена

-

СДЕЛКИ

USD

Цена откр.

482,00

Цена закр.

482,00

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482,00

Макс. Цена

482,00

Ср/взв. Цена

482,00

-0.16

Кол-во сделок

1

Объем (инвал.)

200 000

0бъем (драм)

96 400 000