YEREVAN, August 13. /ARKA/. The boards of the Central Bank of Armenia downed the benchmark refinancing rate on Tuesday by 0.25 percentage points to 6.75%, the regulator’s press office reports.
The central bank’s board says a 0.9% deflation was recorded in the country in July 2014 against a 0.4% inflation in the same month a year earlier. The 12-month inflation will stand at 0.4% given this.
The board members think that the 12-month inflation will gradually rise in the next months and will stand within the projected frames in the first quarter of 2015.
The regulator also predicts that uncertainty will remain because of outside geopolitical processes, and this is connected with economic prospects in partner countries.
Nevertheless, no significant inflation pressures are expected from the outside so far.
The central bank says internal and external demand was weak in the second quarter of this year, and it impacted the formation of a low inflation.
According to the regulator’s forecast, the increase in prices for electricity in Armenia in August and introduction of obligatory marking on certain products will expand inflation environment, but the 12-month inflation will remain low in the nearest future, subsiding to the lower margin of the targeted range.
The softening of monetary requirements by the central bank along with the expected expansionary tax and budgetary policy in the second half of this year will lead to expansion of the aggregate demand and recovery of inflation speed throughout 2015.
At the same time, the central bank, doesn’t rule out some corrections in its monetary policy that may be done depending on future inside and outside economic developments for ensuring the projected inflation rate.
The previous change in the refinancing rate was made on June 24, when the central bank lowered it by 0.25 percentage points to 7%.
In the 2014 government budget, inflation is projected at 4% (±1.5%),, and GDP growth at 5.2%. -0---