YEREVAN, May 26. / ARKA /. Armenian banks expect this year’s inflation to be at 4.7 %, down from their previous forecast of 5.3%, according to a Central Bank of Armenia report on inflation.

The Central Bank said the forecast was lowered due to the findings of a survey of financial institutions and households. It said the new projection is largely consonant with the gradual softening of the inflationary environment.

The forecast of credit institutions is 4.2 percent, as much as their previous forecast. The forecast of households did not change either. It is 4.9%.

According to the survey, expectations of market interest rates behavior have changed slightly mainly due to regulator’s recent decision to lower its reservation requirement in drams from 4% to 2%.

As a result, it is expected that interest rates on funds in drams will grow, while the rates on funds in foreign currency will be decreasing.

The Central Bank expects this year’s inflation to be within 2.5%-5.5 %. The government’s projection of GDP is 5.2 percent. It also expects a 4 % (± 1.5%) inflation. -0-