Armenia’s CB not to change refinancing rate within current economic development trends

16.03.2012 14:41
Armenia’s CB not to change refinancing rate within current economic development trends

YEREVAN, March 16. /ARKA/.  The Central Bank of Armenia said Friday in the existing course of economic development it won’t change the current refinancing rate at 8 %. This will have a neutral impact on inflationary  environment, the Bank’s press service reported ARKA.
In the context of inner and outer development Armenia’s economy is evolving  in accordance with the forecasted trends  in the monetary and loan policy programs, despite some possible risks’ appearance, according to the press release. Thus, CB says the 12-month inflation rate, that lost 1.8 p.p. reaching 3% in February from January,  is quite  likely to be within the projected appropriate  4% (± 1.5%) corridor.
The CB Council also said the development of Armenian economy, particularly  fiscal  policy, private spending and labor market, continues to have a neutral influence on inflationary  environment. The prices on raw commodity and food product markets formed a weak inflationary environment due to positive expectations coming from economic activity’s tendencies as well as economic growth perspectives in the world leading countries, the Council said.
Moreover, while maintaining its geopolitical situation  the Far East reported increase in oil prices that was gauged as a risk in the Central Bank’s monetary and loan policy for the first quarter of 2012. However, the Council does not assess this issue as affecting  inflationary environment  in the coming months. CB also reported on the tendencies of financial market development in February. The results show that an average interest rate on government  bonds with one-year maturity period slumped 1.7 p.p. to 8.9%, interest rates on repo deals also dropped by 0.5 p.p. to 10.9% and those on inter-banking repo deals -by 0.3 p. p. to 10.7 %.
The Council of Armenia’s Central Bank decided to leave refinancing rate at 8% unchanged, lombard repo rate at 11 %, and the rate on commercial banks’ deposits with  the Central Bank- 5 %. Last time the Central Bank downgraded refinancing rate by 0.5 p. p. to 8 % on September 6, 2011. —0--


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