YEREVAN, 10 September. /ARKA/. The decision of the Board of the Central Bank of Armenia to lower the refinancing rate by 0.25 percentage points today to 7.50% is based on balancing two factors, the regulator’s head Martin Galstyan said.
‘We have been consistently, for quite a long time – since June last year – lowering the refinancing rate. This policy is not only due to what is happening around us, but also due to the policy we had pursued before that. Through our prudent policies, we were able to address the inflation problem much earlier than many other countries. This allowed us to open up our policy space,’ Galstyan told a press conference on Tuesday.
He noted that the latest Central Bank’s surveys show a slight decrease in the share of people with high inflation expectations and an increase in the share of those with low inflation expectations.
At the same time, he said, the uncertainty component remains significant. Noting that the Central Bank of Armenia, as well as the majority of market participants expect that the US Federal Reserve will take the course of weakening the key rate after September 18, he stressed that the policy of the Armenian regulator should not be fully associated with the further behaviour of the US Federal Reserve policy.
‘We take into account not only the US Fed policy, but mainly the developments in our economy, domestic demand, the situation in the labour market. Balancing these two (factors), today we came to the conclusion that (lowering t5he key rate by 0.25 p.p. is a reasonable decision,’ he said.
Today’s decision by the Central Bank is the 11th consecutive lowering of the refinancing rate since last June and the sixth since the beginning of this year. -0-
