Central bank of Armenia holds its benchmark refinancing rate steady at 8.0 percent

YEREVAN, February 12. / ARKA /. The Central Bank of Armenia (CBA) said today it held its benchmark refinancing rate steady at 8.0 percent. 

In a statement it said inflation rose by 2.9 percent in January 2013 resulting in a 12-month 2.6% inflation, which was close to the lowest level of its confidence band of  4 ± 1.5%. The Central Bank said also the inflation will rise in the first half to stabilize around its confidence band.

It said amid the ongoing uncertainties concerning political solutions to the debt problems of the developed countries, the global economy is expected to slowly recover in the forecast horizon. Under the influence of a low external demand, formed under these conditions, international prices of major commodities and food products will be relatively stable, remaining at the current high level.

The Board said amid increasing economic potential and a rise in agricultural production in a low inflation environment an excess growth of real consumption has formed, which in the forecast horizon will be  stabilizing around balanced level. In these circumstances, some economic slowdown is expected.

As a result of anticipated weakening of private demand and weaker deterrent effect of fiscal policy the inflation in Armenia is not going to have a strong  impact on domestic prices. Last time CBA changed its refinancing rate on September 6, 2011, reducing it from 8.5% to 8%. -0-