YEREVAN, March 24. /ARKA/. The board of the Central Bank of Armenia decided today to leave the refinancing rate unchanged at 10.5%, the regulator’s press office reports.
A 0.2% deflation was recorded in Armenia in February 2015 against a 1.2% deflation in February 2014, and a12-month inflation stood at 5.4% by the end of the month.
Latest developments outside of Armenia were mostly is conformity with the forecast the central bank made in the beginning of the year, and economic growth either in the United Sates or in Euro zone and Russia was proven to be in tune with the regulator’s outlook.
As it was expected, deflation continued at international primary commodity and food markets. Taking into account the mentioned developments, the central bank’s board expects a slight inflation influence from the outside.
The board also placed it on record that economic activity in Armenia exceeded expectations in January and February, what was mostly due to a higher-than-projected growth in agriculture and construction.
Tension at financial and trade markets triggered by developments at the end of 2014 has already abated, and this prompted the central bank to continue lowering short-term market interest rates, to down the rates for advances on securities to 12% and restore its natural deviation from the refinancing rate at 1.5 percentage points.
A zero or soft mechanism of obligatory reservation of the attracted long-term deposits took force on March 1, and this, along with other macroprudential measures taken in the first quarter, significantly neutralized impacts of the tightened obligatory reservation requirements.
And this brought some mitigation to monetary conditions and will spur economic activity growth soon.
Later, the central bank will correct its monetary policy’s directions, ensuring the projected inflation rate in the midterm.
The last change of the refinancing rate was made on February 10, 2015 – the board then raised it from 9.5% to 10.5%. —0—-
