YEREVAN, April 13, /ARKA/. Armenia’s Central Bank Board decided to raise the refinancing rate by 0.25 percentage point today to 8.5%, the Central Bank said in a statement posted on its website. The statement said that Armenia’s inflation rate in March 2011 came to 0.8% with the average annual rate falling to 11.5%.
The Central Bank said it was alarmed by increasing inflation pressures driven primarily by rising prices of foodstuffs, saying this was one of the reasons making it to continue tightening up its monetary policy.
The previous increases on the refinancing rate took place on March 4, 2011 when the bank raised it by 0.25% p.p. to 8.25%.
Armenia’s refinancing rate was raised five times throughout 2010 – January 21, February 16, March 9 and April 13 – by 0.5 p.p. and May 11 – by 0.25 p.p. As a result, the rate increased from an initial 5% to 7.25%.
The Central Bank said despite the falling prices of foods at global markets observed currently, they rose more in the fist quarter of 2011 than predicted and this will maintain external inflationary pressures for some time in future. The Board also said it expects a string of measures implemented presently in agriculture to help restore the demand that declined in 2010. The government expects the inflation this year to be within 4±1.5%. -0-
