Central Bank of Armenia keeps refinancing rate at 6%

YEREVAN, DECEMBER 25, ARMENPRESS. The Board of the Central Bank of Armenia made a decision to keep the refinancing rate unchanged, setting it 6.0% during today’s session, the CBA told Armenpress.

1.0% inflation has been recorded in November, and in such circumstances the 12-month inflation decreased comprising 1.8% by the end of the month. The CBA Board assesses that the low inflationary environment will be maintained in the upcoming months and the 12-month inflation will be formed in a somewhat lower level from the targeted indicator.

The global economic growth trends have been in accordance with the predictions under which the central banks of leading countries are gradually toughening the terms of the monetary-loan policy. At the same time, the inflationary environment of main goods has somehow weakened in the international markets, based on which the CBA Board estimates that no inflationary pressures are expected from the external sector in coming months.

The Board records that in the second half of 2018 the gross demand remains relatively weak in connection with the restraining position of fiscal policy and certain weakening of private expenditure. On the other hand, the low inflationary environment, in case of low growth rates of private consumption, contributed to the maintenance of purchasing of real incomes and anchoring inflationary expectations.

Taking into account the aforementioned developments, the CBA Board finds appropriate to keep the current level of the refinancing rate, which is assessed as more promoting, taking into account the increase of interest rates in partner countries. The Board also estimates that in case of predicted macro-economic developments, there will be a need for long maintenance of promoting conditions for ensuring price stability in the medium-term. As a result, the inflation is expected to fluctuate in a lower range, stabilizing over a targeted 4% figure.

In case of deviation risks from the predicted scenario of economic development inflation, the CBA will clarify the monetary-loan policy directions by ensuring the price stability.

Edited and translated by Aneta Harutyunyan