YEREVAN, November 6. / ARKA /. Armenia’s Central Bank Board said it decided today to leave its key  refinancing rate unchanged at  8%. The Central Bank Board said in a report that the inflation in October 2012 was 1.2 percent, as a result the 12-month  inflation was 3.4 percent which was  within the target band (4±1.5 percent).

The Board also said weak external inflationary pressures persist amid the ongoing uncertainty about finding political solutions to the debt problems of the developed countries in the forecast horizon. This, it said, is expected to lower global demand.

However, the continued high international prices for wheat are an indication of tensions on international food markets, which will continue to impact domestic prices, which is expected to be reflected primarily in prices of  bakery products. The Board said prices of imported fuels may also increase because of ‘geopolitical developments.’

The Central Bank of Armenia Board said also the anticipated impact from economic developments, remains moderately inflationary  due to the continued acceleration of private consumption. The impact of these inflationary pressures on domestic prices will be offset by the limiting impact of fiscal policy.

"In view of the behavior of the 12-month inflation  in recent months, as well as weak inflationary pressures expected from  external sector  and the Armenian economy  on domestic prices, the Board of the Central Bank considers it appropriate to refrain from changing the level of refinancing. Under these conditions, 12-month inflation in the coming months will move closer to 4%",  the Board’s report says. -0-