YEREVAN, August 18. /ARKA/. Inflation in Armenia by the end of 2011 will be formed in the frames of permissible fluctuation corridor of 4% ±1.5%, stabilizing at the lower level, according to the press-service of CBA.
This is due to tendencies of stabilization of food prices in the world markets and developments in the domestic economy, as well as more favorable conditions in agriculture compared with the last year.
Taking into account the problems existing in the world market due to risks and uncertainties, CBA Board still refrained from easing monetary-credit conditions.
The Board believes that tightening of monetary-credit policy at the beginning of the year, restraining fiscal policy and slow growth in private consumption recovery will continue to contribute to the further reduction of inflation rates.
The report notes that in July 2011 that prices for basic food products in the world markets maintained a trend of relative stability. And, despite the changes of the debt ceiling of US, still tense situation related to the debt problem in eurozone, volatility of oil prices on industrial products and precious metals increased.
The meeting was marked by market developments in July resulting in average interest rate on government bonds with maturities up to one year declined by 0.93 p.p. and amounted to 8.69%, interest rate on repo market in Armenia increased by 0.38 p.p. compared with June, and July was 10.57%, while at the inter-banking repo market – by 0.31 p.p. to 9.91%.
The document noted that the trends of monetary-credit indicators formed in July correspond to the trends planned in the last program of monetary-credit policy for the 3rd quarter of 2011.
Money supply in July increased by 3.3% due to the growth by 5.7% of cash money being in circulation and increase of drams deposits by 8.8%.
According to National Statistic Service of Armenia, inflation in July 2011 compared to the same period of 2010 was fixed at the rate of 6.3%.
CBA Board at the meeting of August 9 decided to leave unchanged refinancing rate of 8.5%. –0—
