YEREVAN, JULY 30, ARMENPRESS. The Board of the Central Bank of Armenia (CBA) has made a decision to keep unchanged the refinancing rate, at 5.75%, during today’s session, the CBA told Armenpress.

In June 2019, 1.9% deflation was recorded against the 1.6% of June 2018. In such circumstances the 12-month inflation decreased, comprising 2.5% conditioned with the deep seasonal decline of prices of agricultural goods. Meanwhile, the normal inflation increased to some extent during the month.

In the external sector the trends of the slowdown of global economic growth and weakening of demand are maintained, under which the central banks of Armenia’s main partner countries are going to run a policy of weakening the monetary-credit policy. In such conditions the inflationary environment in international food and raw material markets remains low, based on which the CBA Board estimates that overall inflationary pressures are not expected from the external sector.

The Board states that in the second quarter, in accordance with the expectation, high economic activity growth rates were maintained condition by the growth of private consumption. The impact of the fiscal policy carried out in the second quarter on the domestic demand is assessed as restraining. It’s expected to be enlarging in the second half of the year as a result of which the restraining influence of the fiscal policy on the gross demand will greatly decline.

In such circumstances, giving the preference to the gradual recovery of inflation, the CBA Board finds appropriate to keep the current monetary-loan terms by keeping unchanged the refinancing rate. At the same time, in case of predicted macroeconomic developments, it will be necessary to keep the expansionary position in the long run for the implementation of the inflation goal in the medium run. As a result, the expectation is that inflation will still be running below the lower part of the confidence band and stabilizing around the targeted figure in the medium run.

Edited and translated by Aneta Harutyunyan