Central bank to reduce Lombard repo rate in first quarter

23.02.2015 20:34
Central bank to reduce Lombard repo rate in first quarter

YEREVAN, February 23. / ARKA /. Armenia's Central Bank said today it will reduce again the rate on Lombard repo in the first quarter of this year in order to trigger a drop in rates in short-term loans in drams.

The regulator said it had raised  earlier this year the key refinancing rate to 10.5%  bringing it close to the rates on short-term loans in drams, which is expected to help stabilize the situation in the financial market", - the report says.

At an extraordinary meeting on January 22, the Central Bank raised the key refinancing rate by 1 p.p. to 9.5% and lowered the rate on Lombard repo by 3 percentage points to 17%. At a February 10 meeting the regulator again raised the refinancing rate to 10.5% lowering the rate of Lombard repo to 14.5%.

Earlier, in order to curb the pressure on the currency market,  after US dollar jumped by 16.6 points in late 2014 November to 435 drams, the Central Bank started to raise the cost of short-term liquidity in drams by raising the Lombard repo rate to 21%. -0-

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