YEREVAN, February 14. /ARKA/. Armenia’s Central Bank said today it has cut its refinancing rate by 0.25 percentage point to 6%. The Central Bank began to gradually reduce the refinancing rate from the second half of 2015. As a result, it fell from 10.5% in June 2015 to 6.25% in December 2016. During this period, the regulator reduced the refinancing rate 11 times, including 8 times in 2016.
According to the regulator, the inflation in January 2017 was at 2.6%, up from 2.2% inflation in the same month last year. As a result the 12-month deflation was softened to 0.6%.
The Central Bank said it does not expect a significant inflationary pressure from external markets because the global economic growth is still slow, while inflation processes at external commodity markets have not changed.
The regulator said although economic growth estimates for 2016 were revised downward due to the influence of demand factors, domestic demand nonetheless is gradually recovering thanks to stimulating monetary and fiscal policies implemented in 2015 and 2016.
The Central Bank said also that achieving the projected inflation will slow down due to expectations generated by the low prices of some non-food items, as well as by a decline in gas prices since January and electricity since February.
“Taking into account these factors, as well as a deterring fiscal policy for 2017 the Central Bank considers it appropriate and feasible to loosen monetary conditions”, it said in a statement. -0-
