Central bank cuts key rate to 8.5 percent

16.02.2016 19:13
Central bank cuts key rate to 8.5 percent

YEREVAN, February 16. /ARKA/ Armenia’s Central Bank has cut today the key refinancing rate by 0.25 percentage points to 8.5. The regulator said 2.2% inflation was recorded in January 2016, down from 2.5% recorded in 2015 January. As a result the 12-month inflation in 2016 January was minus 0.4%.

According to the regulator, the low inflation rate was prompted by a decline in agricultural prices over the same period last year, as well as by the deflationary influence of the external sector on domestic prices.
The Central Bank said it estimates the 2015 economic growth at the level of 3.2%, facilitated largely by a growth in the agricultural sector and the mining industry.

The Central Bank estimates that in the short term no serious inflationary pressures from the domestic economy and external sector are expected. As a result the weak deflationary environment will continue, it said.

The regulator also said low inflationary environment in the coming months will continue, and then will gradually expand in view of the ongoing substantial easing of monetary conditions started in 2015 and will be close to the projected target in the forecast horizon. It said also rates on Lombard repo and attracted funds are set at 10% and 7% respectively.

Last time the regulator cut the refinancing rate was on December 22, 2015, when it lowered it by one percentage point to 8.75%. -0-


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