YEREVAN, May 15. /ARKA/. Armenia’s Central Bank decided today to leave the key refinancing rate unchanged at 6%.
According to the regulator, in 2018 April 0.3% deflation was registered as opposed to 1% inflation reported in 2017 April. As a result, the 12-month inflation in late April 2018 stood at 2.4%.
According to the regulator, the low inflation resulted from a slowdown in the growth of natural inflation and a drop in prices for seasonal goods. The Central Bank believes that in the coming months inflation will remain within the projected range.
The CB said also that the first quarter of 2018 was marked by a relatively high economic activity, which was driven by growth in industry, construction and services. The growth was accompanied by high rates in recovery of domestic demand. However, the CB expects the growth to somewhat decrease from the second quarter, approaching gradually to a stable level.
The Central Bank said inflation expectations have stabilized over the past year, and no additional inflationary pressure is expected in the coming months. At the same time, according to the regulator’s estimates, the impact of the political events in April and May on the financial market was effectively neutralized through the use of proportionate tools as part of the Central Bank’s independence mandate.
Taking into account the above, the CB considers it expedient to maintain the existing monetary and credit terms, believing at the same time that in view of projected developments in the near future there will be a need to gradually neutralize the stimulating monetary terms for the implementation of inflation targets.
As a result, it is expected that the 12-month inflation will fluctuate within the acceptable range, stabilizing around the target of 4%.
In March 2017, the Central Bank suspended the easing of monetary policy, setting the refinancing rate at 6%. -0-
