Regulator: Inflation growth to slow down first half of this year
13.03.2011,
05:39
Inflation growth will slow down in the first half of this year, Arthur Stepanyan, chief of the central bank’s division in charge of monetary policy, said Saturday at a news conference.
YEREVAN, March 12. /ARKA/. Inflation growth will slow down in the first half of this year, Arthur Stepanyan, chief of the central bank’s division in charge of monetary policy, said Saturday at a news conference.
He said that inflation in the country would precipitously subside in the second half of this year coming close to the 4-5.5% projected in the government budget.
“The central bank’s steps aimed at curbing inflation lay ground for returning inflation to the projected rate,” he said.
In the 2011 government budget, inflation is projected at 4±1.5%.
Voicing concern over the current inflation rate, Stepanyan said that year-on-year inflation reached 12.4% in February 2011 mainly because of hikes in food prices.
“The steps being taken by the government and the central bank’s policy will lay real ground for abatement of inflation in the second half of this year,” he said. “Outlooks for prices for agricultural products will be positive either in Armenia or All over the world.”
Asked by ARKA News Agency’s correspondent about the instruments the central bank intends to use for curbing inflation, Stepanyan said that the regulator would keep using mainstream instruments.
“The central bank will raise benchmark refinancing rate and change mandatory reservation norms,” he said. “There are no countries whose regulators have other instruments but these ones.”
On March 4, the central bank’s board raised benchmark refinancing rate by 0.5 percentage points to 8.25%.
In February, the regulator changed mandatory reservation norms, which now oblige banks to reserve 9% of their 12% mandatory reservation in drams instead of former 6%, and the remaining 3% they can reserve in foreign currencies instead of former 6%.
Stepanyan said that other, not so traditional instruments can be used by the government and other competent institutions.
On Thursday, the Armenian government approved amendments to the law on trade and services and the code on administrative offenses.
The amendments empower the government to interfere in price-making process in the event of 30-percent rise in 20 names of primary necessities over one month.
The government will have 90 days to interfere in this process and put things right.
On Friday, Armenian President Serzh Sargsyan instructed the government and the central bank to do whatever necessary to lower inflation rate.
In 2010, 9.4% inflation was recorded in Armenia. .-0--
He said that inflation in the country would precipitously subside in the second half of this year coming close to the 4-5.5% projected in the government budget.
“The central bank’s steps aimed at curbing inflation lay ground for returning inflation to the projected rate,” he said.
In the 2011 government budget, inflation is projected at 4±1.5%.
Voicing concern over the current inflation rate, Stepanyan said that year-on-year inflation reached 12.4% in February 2011 mainly because of hikes in food prices.
“The steps being taken by the government and the central bank’s policy will lay real ground for abatement of inflation in the second half of this year,” he said. “Outlooks for prices for agricultural products will be positive either in Armenia or All over the world.”
Asked by ARKA News Agency’s correspondent about the instruments the central bank intends to use for curbing inflation, Stepanyan said that the regulator would keep using mainstream instruments.
“The central bank will raise benchmark refinancing rate and change mandatory reservation norms,” he said. “There are no countries whose regulators have other instruments but these ones.”
On March 4, the central bank’s board raised benchmark refinancing rate by 0.5 percentage points to 8.25%.
In February, the regulator changed mandatory reservation norms, which now oblige banks to reserve 9% of their 12% mandatory reservation in drams instead of former 6%, and the remaining 3% they can reserve in foreign currencies instead of former 6%.
Stepanyan said that other, not so traditional instruments can be used by the government and other competent institutions.
On Thursday, the Armenian government approved amendments to the law on trade and services and the code on administrative offenses.
The amendments empower the government to interfere in price-making process in the event of 30-percent rise in 20 names of primary necessities over one month.
The government will have 90 days to interfere in this process and put things right.
On Friday, Armenian President Serzh Sargsyan instructed the government and the central bank to do whatever necessary to lower inflation rate.
In 2010, 9.4% inflation was recorded in Armenia. .-0--
