YEREVAN, January 22. /ARKA/. The council of the Central Bank of Armenia (CBA) increased the refinancing rate by one percentage point to 9.5% at its special meeting on Wednesday, the press office of the regulator reported.
According to the central bank, Armenia’s inflation was 3% in December 2014, having brought the twelve-month inflation to 4.6%.
Deflation trends continued with the speed and scale of their probable influence on price changes in Armenian markets being still unclear after the last revision of the refinancing rate, says the report.
Deflation pressures were recorded in Armenia’s partner countries as well, apart from Russia where unprecedented ruble depreciation led to an adjustment to price rises at the end.
On the other hand, despite certain mitigation in the local market at the end of 2014, high inflationary expectations are still there, leading to high demand for dram interest rates among entities in the financial market, according to the report.
CBA’s council says the current high interest rates reflect somehow the long-term global rate growth risks.
It is worth to raise the refinancing rate for maintaining the monetary-credit policy approaches, the council says. At the same time, the council lowered the Lombard repo rate by 3 percentage points to 17% to reduce the current high interest rates, according to the report.
This, according to the regulator, will help neutralize high inflationary expectations and to ensure the target inflation level.
The next decision on the monetary and credit policy priorities is scheduled for February 10, followed by a release of the policy program for the first quarter with the recent developments and projections in detail.
The previous revision of the refinancing rate took place on December 23, 2014, when the rate was raised from 6.75% to 8.5%. –0–
