Armenian central bank downs key refinancing rate 0.25% to 10.25%
11.08.2015,
21:22
The board of the Central Bank of Armenia decided today at its meeting to down the key refinancing rate 0.25 percentage points to 10.25%, the press office of the regulator reports.
YEREVAN, August 11. /ARKA/. The board of the Central Bank of Armenia decided today at its meeting to down the key refinancing rate 0.25 percentage points to 10.25%, the press office of the regulator reports.
The board said that a 2.2% deflation was recorded in Armenia in July 2015 against a 0.9% deflation in July 2014, and twelve-month inflation subsided to 4.2%.
Given actual developments in the outside sector, the global economy grew slower than expected as deflation environment remained at the world trade market.
Taking into account these processes and slow global demand forecasts for the next months as well as increase in demand at some separate trade markets, the central bank's board continues rating the expected impacts from the outside as not inflationary.
The board says economic activity growth exceeded expectations in the second quarter. In particular, economic activity was 4.2% in Jan-June 2015, compared with the same period a year before, mainly thanks to a faster growth in agriculture and industry.
«Despite the ongoing fast-growing export of agricultural products and favorable outlooks for the nearest future, positive processes in agriculture will create low prices for agriculture products similar to the previous year's prices,» the regulator says. «The present weak inflation environment will be partially neutralized by the stimulating tax and budgetary policy.»
The central bank also does not consider the inflation effect expected before in connection with increase in prices for electric energy on August 1.
The board, taking in consideration these developments, says that the 12-month inflation will subside in the second half of this year and will be fluctuating near the bottom limit and finds it reasonable to soften monetary requirements.
«Along with that, risks still remain in both outside and inside sectors of the economy, and if they strengthen, inflation environment may widen and the monetary policy may be corrected to ensure the projected inflation rate in the medium run,» the central bank's board says.
The previous change in the key refinancing rate took place on February 10, 2015, when the central bank raised it from 9.5% to 10.5%. --0----
The board said that a 2.2% deflation was recorded in Armenia in July 2015 against a 0.9% deflation in July 2014, and twelve-month inflation subsided to 4.2%.
Given actual developments in the outside sector, the global economy grew slower than expected as deflation environment remained at the world trade market.
Taking into account these processes and slow global demand forecasts for the next months as well as increase in demand at some separate trade markets, the central bank's board continues rating the expected impacts from the outside as not inflationary.
The board says economic activity growth exceeded expectations in the second quarter. In particular, economic activity was 4.2% in Jan-June 2015, compared with the same period a year before, mainly thanks to a faster growth in agriculture and industry.
«Despite the ongoing fast-growing export of agricultural products and favorable outlooks for the nearest future, positive processes in agriculture will create low prices for agriculture products similar to the previous year's prices,» the regulator says. «The present weak inflation environment will be partially neutralized by the stimulating tax and budgetary policy.»
The central bank also does not consider the inflation effect expected before in connection with increase in prices for electric energy on August 1.
The board, taking in consideration these developments, says that the 12-month inflation will subside in the second half of this year and will be fluctuating near the bottom limit and finds it reasonable to soften monetary requirements.
«Along with that, risks still remain in both outside and inside sectors of the economy, and if they strengthen, inflation environment may widen and the monetary policy may be corrected to ensure the projected inflation rate in the medium run,» the central bank's board says.
The previous change in the key refinancing rate took place on February 10, 2015, when the central bank raised it from 9.5% to 10.5%. --0----
