YEREVAN, December 26. /ARKA/. Armenia’s Central Bank decided today to keep its key refinancing rate unchanged at 6 percent. It said also consumer prices rose by 2.0 percent in November, month-on-month, and by 2.2 percent year-on-year.
It said also it expects the 12-month inflation to be at the lower boundary of the permissible range of fluctuations. The regulator said changes in the external sector basically did not differ from its forecasts. Since growth tendencies of the world economy and inflation at international commodity markets continued, the Central Bank expects some inflationary pressures from the external sector in parallel with the expansion of external demand.
The Central Bank also noted the economic activity index in January-November significantly exceeded expectations, driven largely by growth in services and industry.
The domestic private demand is also expected to be at a higher level than expected, contributed by the expansionary monetary policy and a low inflationary environment. The increase in domestic demand is being expressed by the high growth of trade and imports, as well as by the behavior of natural inflation and inflationary expectations, the regulator said.
The Central Bank said it is expedient to maintain the current stimulating level of monetary conditions, taking into account the need to ensure the stability of demand recovery and the overestimated effect of changes in excise rates and customs duties on inflation expectations.
At the same time, the regulator said in accordance with the forecasted events in the near future, it will be necessary to gradually neutralize the stimulating monetary and credit conditions for achieving the medium-term target inflation.
In March 2017, the Central Bank suspended the easing of monetary policy, setting the refinancing rate at 6%. -0-
