CBA keeps refinancing rate unchanged, sets it 6%
YEREVAN, FEBRUARY 13, ARMENPRESS. The Board of the Central Bank of Armenia made a decision to keep the refinancing rate unchanged, setting it 6.0% during the February 13 session, the CBA told Armenpress.
2.7% inflation was recorded in January 2018 in case of which the 12-month inflation as of late January comprised 2.7%.
The factual developments in the foreign sector were mainly expressed by ongoing improvement trends of global economic growth and inflationary environment being maintained in some international commodity markets. In this regard the CBA Board expects from the foreign sector weak inflationary impacts in parallel with the expansion of foreign demand.
The Board estimates that quite a high economic activity was observed in the fourth quarter of 2017 which is mainly linked with the high growth rates in the fields of services and industry. The high economic activity was accompanied by rapid growth rates of domestic private demand which is contributed by expanding monetary-loan policy and the relatively high growth in lending the economy by the financial system. Nevertheless, in order to ensure the demand recovery stability, the necessity for monetary-loan promotion is still maintained, especially when the additional inflationary expectations greatly weakened.
Taking into account the aforementioned, the CBA Board finds it appropriate to maintain the current level of monetary-loan terms. At the same time the Board states that under the predicted developments there will be a need for neutralization of monetary-loan terms in the medium-term aimed at implementing the inflation goal. As a result it is expected that the inflation will gradually increase, fluctuating in a permissible range, and later stabilizing over a targeted figure.
In case of deviation risks from economic development prospects and inflation recovery trajectory, the CBA will clarify the monetary-loan policy directions.