YEREVAN, September 4. /ARKA/. The Central Bank of Armenia said today it left its key refinancing rate unchanged at 8%. It also said prices in August dropped by 0.4%, as a result the 12-month inflation amounted to 2.5%, in line with the lower threshold of the projected annual 4 ± 1,5% inflation rate.
The Central Bank said also domestic and external economic developments in August proceeded mainly in line with the baseline scenario of the monetary and credit policy for the third quarter. Amid ongoing uncertainty regarding political solution to the debt problems of the developed countries, the low level of global demand will persist. On the other hand, the continued growth of grain prices has brought about inflationary environment that is partially reflected in the behavior of domestic prices.
The Central Bank said also the inflation pressure on domestic prices, caused by growing private demand will continue. This to some extent is being neutralized by the deterrent effect of fiscal policy.
“Inflationary developments of the last few months indicate that they are in line with the baseline scenario of monetary policy for the third quarter. Based on this the Central Bank Board is guided by the basic directions of the monetary policy,” it said.
“As a result it is expected that the 12-month inflation will be within the projected target,’ the Central Bank said.
At the same time, to reduce the volatility of the interest rates in the interbank market, the Board of the Central Bank will continue to reduce the difference between the interest rate of deposits attracted by the Central Bank and lombard repo, having decided to cut the difference from 5 p.p. to 4 p.p. -0-
