YEREVAN, October 7. / ARKA /. Following a September 24 Board meeting Armenia’s Central Bank said it expects a short-term inflation to gradually reduce to the target level and remain within that band in the forecast horizon.

The Central Bank said the August inflation in 2013 was 0.3 % against 0.4 % deflation in the same period of the previous year. This resulted in a 12-month 9.3 percent inflation in September.

The Central Bank blamed the August inflation on a 2.6 % growth in prices for services, including a 6% increase in utility rates due to an increase in the prices of natural gas and electricity. In August, the natural inflation was 0.1% resulting in a 12 -month 5.7% inflation.

The Central Bank expressed confidence that the September inflation rate will be lower than the current interest rate. Board members agreed that in the next few months the 12-month inflation will be falling to approach the projected figure.

"Given the weakening economic activity, external and domestic inflationary pressures and expectations of positive interest rates as a result of expected decline in inflation in the coming months, the Board considers that the available monetary conditions will balance the risks of inflationary expansion and a reduction in economic activity," the bank said in a statement.

It said if the decline in inflation and low domestic demand continue the Bank will respond accordingly by easing monetary conditions. The Central bank’s projected inflation for 2013 is at 4 % (± 1.5%). -0-