YEREVAN, November 10. / ARKA /. Armenia’s Central Bank said on Tuesday it had cut its key refinancing rate to 9.75 percent from 10.25 percent. The annual inflation in the country was at 1.9 percent in October, down from 3.3 percent in September, according to Central Bank data.
The Central Bank said also the slow growth of the world economy, accompanied by a steady decline in prices at world commodity markets will continue in the coming months, and this in mind it expects the deflationary impact of the external sector on domestic prices.
The Central Bank said the 3.7% economic activity in January-September was driven largely by the growth in agricultural sector and the mining industry. The domestic demand remains weak, despite the stimulating effect of the fiscal policy.
The Central Bank believes that along with the decline in inflation expectations the rise in prices for seasonal agricultural products will also reduce. Under these conditions, the regulator considers it appropriate to ease monetary conditions, which in the case of low inflation expectations, could have been more abrupt.
According to the Central Bank, the inflation will remain low in the coming months and then they will rise slowly to stabilize around the target band. The government forecasts annual inflation in a range of 2.5-5.5 percent in 2015, the same as last year’s target.-0-
