YEREVAN, September 22. / ARKA /. Armenia's Central Bank (CB) said on Tuesday that it had kept its key refinancing rate unchanged at 10.25 percent.

The CB said 0.1% inflation was recorded in August; down from 0.7% recorded a year earlier as a result the 12-month inflation declined to 3.6% in late August.

The Central Bank said also based on slow global economic growth trends and the persisting inflationary environment in international commodity markets its Board believes that no external inflationary pressure is expected in the coming months.

The Board said economic activity in the third quarter grew higher than expected, primarily driven by demand factors. Stimulating fiscal policy has contributed to some recovery in domestic demand, which to a certain extent had offset the deflationary environment.

According to the Board, these developments led to an acceleration of net exports, which significantly improved the external balance of Armenia. The Board said also it believes that these key economic indicators have substantially increased the country's resilience to external shocks.

All this in mind the Board said it was appropriate to preserve the current monetary terms, in which the 12-month inflation is expected to decrease at the end of the year to the lower level of the target band.

The Board said in accordance with the inflation expectations and developments in external financial markets it will specify directions of monetary policy when necessary to achieve its goal of stabilizing prices. -0-