YEREVAN, September 6. /ARKA/. The board of the Central Bank of Armenia decided Tuesday to down benchmark refinancing rate by 0.5 percentage points to 8%, the central bank’s press office reports.

According to the press release, 0.6% deflation was recorded in Armenia in August, compared with July.

As a result, year-on-year inflation subsided by 1.5 percentage points in August, compared with the previous month, to 4.8%, the indicator that is within the projected 4±1.5% range.

The board found the impetuses coming from the outside sector of the economy and impacting inflation environment neutral with some probability of deflation risks.

Nevertheless, it was stressed at the board meeting that the world economy’s prospects remain uncertain due to misbalances of developed countries.

The regulator’s board thinks that the current impact of domestic demand on inflation environment is subsiding now – impacts of private expenses are considered as neutral, and those of tax and budgetary policy are viewed as curbing.

Things at labor market, with its ratio of productivity to nominal salary, have neutral effect on inflation environment as well.

The regulator also says that inflationary developments in the recent months were in tune with the 2011 monetary and budgetary policy.

“Softening of monetary and credit terms are believed to keep inflation within the projected range of fluctuations creating additional impetuses for growth of economic activity,” the press release says.

The previous change in benchmark refinancing rate was on April 13, when it was driven 0.25 percentage points up to 8.5%.

In the 2011 government budget, inflation in Armenia is projected at 4% (±1.5%). -0-