YEREVAN, June 27. /ARKA/. Armenia’s Central Bank decided today to keep the refinancing rate unchanged at 6%. The bank said in a statement that a deflation of 0.2% was recorded in May, down from 0.7% deflation recorded in May of 2016. As a result the 12-month inflation continued to expand, reaching 1.6% at the end of May, 2017.

Since the outlook for world economic growth continues to improve slowly, and some short-term deflationary effects have been observed in international commodity markets, the Central Bank said it did not expect significant inflationary impacts from the external sector in the coming months.

The Central Bank noted also that the high growth pace in the second quarter was prompted by high growth in mining, services and trade sectors. The regulator noted also the gradual recovery of domestic demand saying if macroeconomic developments occur according to the forecasted scenario, monetary conditions will remain unchanged for some time.

Nevertheless, given the risks of deviating from the inflation recovery path, the Central Bank will make appropriate adjustments to the monetary policy to ensure the planned mid-term target inflation band.
The Central Bank suspended monetary policy easing in March this year. In 2016 alone it lowered the refinancing rate 8 times. The government-projected inflation rate for 2017 is 4% (± 1.5%). -0-