Chairman of parliament committee justifies Central Bank’s decision to raise refinancing rate

15.04.2010 21:09
Chairman of parliament committee justifies Central Bank’s decision to raise refinancing rate

YEREVAN, April 15, /ARKA/. Chairman of an Armenian parliament committee on fiscal and budget issues, Gagik Minasian, has defended today the Central Bank’s decision to raise the refinancing rate further by 0.5 percentage point on Tuesday to 7%.

On April 13 the Central Bank Council said in conditions of expansionary credit and money and fiscal policies , implemented as part of the government’s anti-crisis measures and in conditions of positive global economic recovery, economic growth rate in Armenia was higher than projected. As a result the inflationary environment was shaped largely under the influence of these factors that was in tune with the direction envisaged by the Central Bank.

‘We can say now that the GDP in the first two months was greater than expected. I think the raising of the refinancing rate will not cause big problems,’ he said, recalling that the inflation in March rose to 8.2% from the same period of time last year, while the government plans to curb it to 4% ±1.5%.

He said also the Central Bank has two major tasks -to promote economic development and curb the inflation rate. Gagik Minasian argued that low refinancing rate promotes implementation of expansionary policy, but at the same time it contains big inflation risks. The IMF has projected a 6.2% inflation rate for Armenia this year. -0-


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