YEREVAN, March 30. /ARKA/. Armenian daily ‘Haykakan Zhamanak” (Armenian Time) has rebuked today the Central Bank for its reluctance to cut the benchmark refinancing rate by 4-5 percentage points.
On Tuesday the daily cut the refinancing rate by only 0.25 percentage points, setting it at 8.25%. The two previous rate cuts were announced on February 16 and December 22.
According to the regulator, the cut was prompted by a decrease in the national consumer price index by 1.4 percent year on year last month because of the decreased cost of imported foodstuffs.
The newspaper claims that the Central Bank had a historical opportunity to significantly reduce the refinancing rate because of the deflation.
“According to Armenian law on state budget and the common economic standards, a 5-6% rise in prices is a norm, while Armenia saw a deflation of 1.7%.
This means that when setting the refinancing rate the Central Bank had a 7-8 % inflation rate ‘in store’ In other words, the refinancing rate could have been cut by 4-5 percentage points,” the newspaper says.
As a result, as the newspaper notes, the 0.25% cut in the refinancing rate will not have any meaningful impact on the rate of loans provided to businesses and households. -0-