YEREVAN, December 22. /ARKA. Armenia’s Central Bank on Tuesday cut the refinancing rate by 1 percentage point to 8.75%, saying also the inflation in 2015 November dropped to 0.6% from 1.3% in 2014 November, making the 12-month inflation in 2015 November 1.2%. The drop was prompted by low prices of agricultural products and a decline in prices of some imported goods, it added.
According to the regulator, the slow growth of the global economy and the continuing decline in prices at world commodity markets have also contributed to lower inflation in Armenia. It said this trend is expected to continue into coming months with domestic prices staying under external deflationary pressure.
The Central Bank said also economic activity in the first 11 months of the current year was 2.9%, contributed greatly by growth in agricultural sector and mining industry. It also said despite the stimulating effect of fiscal policy in 2015, domestic demand continues to be low. The resulting low inflation helped reduce inflation expectations.
The regulator believes that inflation risks today that emerged at the end of last year, have largely been overcome and, thanks to a sharp easing of monetary conditions in recent months there is a return now to the normal situation that existed before November 2014.
According to the Central Bank Board, in the coming months the inflation will remain at a low level, and then, as a result of this policy will slowly expand stabilizing around the target band.
In the case of strengthening of inflationary expectations and in the absence of additional internal and external risks the Central Bank said it will continue easing monetary conditions. -0-
