YEREVAN, November 14. /ARKA/. Armenia’s Central Bank has decided today to keep the refinancing rate unchanged at 6%. It said the inflation in October 2017 was 0.8% as opposed to 0.5% inflation recorded a year ago. As a result the 12-month inflation at the end of October was 1.2%.
According to the regulator, the overall inflation is still low due to weaker than expected growth in prices for vegetables and fruits, the impact of which will be leveled in the coming months, while the inflation will be within the projected band.
Concerning the external sector, the Central Bank said the growth trends continued to improve with inflationary phenomena persisting in international commodity markets. Because of this the Central Bank expects some inflationary impact from the external market along with the restoration of external demand.
The regulator said also the high economic activity recorded in the first 9 months of 2017 as opposed to the same time span of 2016, was driven largely by growth in services. Domestic demand continued to recover at a faster than expected pace due to the expansionary monetary policy and some growth in foreign remittances.
The high growth of imports and the behavior of natural inflation also testify to the restoration of domestic demand, it said. At the same time, population’s inflation expectations are growing somewhat faster because of the rise of prices of some imported foods.
In 2016 the refinancing rate was lowered by the regulator 8 times. -0-
