YEREVAN, March 4. /ARKA/. The Central Bank of Armenia decided today to raise its benchmark refinancing rate by 0.5 percentage point to 8.25%, the central bank’s press office reported on Friday.
The previous increase was on February 8, 2011 when refinancing rate was raised by 0.5 point to 7.75%.
The regulator raised it five times over 2010 from 5.0% to 7.25% – on January 21, February 16 and March 9 by 0.5 point each time and on May 11 by 0.25 point.
On January 11, 2011, the Central Bank of Armenia decided to leave the 7.25% refinancing rate unchanged.
According to the press release received from the central bank, 1.9% inflation was recorded in Armenia in February 2011. As a result, year-on-year inflation reached 12.4% amid the mounting food prices – 10.1% price hike.
“The central bank’s board is concerned over expansion of inflationary environment prompted by developments at global food and commodity markets over the last months and still high prices for agriculture products resulting from their dwindling supply and increasing inflationary expectations,” the press release said.
At the same time, the board members think that the current and the projected economic developments will form a moderate inflation pressure as gross demand will recover.
They said that the risks projected by the regulator for the first quarter of this year are seen now and its forecast comes true.
The board said that the current tightening of monetary policy, the changes implemented in the mechanism of mandatory reservation and assistance of other state agencies in implementation of anti-crisis measures would lay groundwork for driving inflation to the projected rate in the second half of this year.
In the 2011 government budget, inflation is projected at 4±1.5%.-0—
