YEREVAN, September 26. /ARKA/. Armenia’s Central Bank said on Tuesday it had decided to keep its key refinancing rate unchanged at 6 percent. It said a 0.4% deflation was registered in August 2017, making the 12-month inflation 0.9% at the end of August. It said the natural 12-month inflation grew at a faster rate than the overall inflation – from 0.7% in July to 1.5% in August, while seasonal prices for agricultural products slowed sharply from 7.8% to 1.2%.
The Central Bank said also the growth in developing countries stimulated significantly higher prices for copper, while other commodity markets experienced restrained inflation. This in mind Armenia’s Central Bank expects a weak deflationary influence from the external sector.
The Central Bank cited also the 6% growth reported in the first half of 2017 from the year ago, saying it exceeded expectations by 1 percentage point. The high economic activity continued through the third quarter as well driven by growth in industry and services, compensating for the decline in agriculture and construction.
According to the Central Bank estimates, domestic demand is recovering faster than expected, as evidenced by high growth rates of lending, imports and the natural inflation.
The Central Bank said also it believes that the current benchmark rate is sufficiently stimulating and will continue for some time in future. It said this trend will continue to effect the aggregate demand, triggering a gradually rising inflation that will stabilize in the forecast period around the projected target.
The Central Bank suspended monetary policy easing in March this year. In 2016 alone it lowered the key refinancing rate 8 times. -0-
