YEREVAN, March 12, /ARKA/. Armenia’s Central Bank decided today to leave the refinancing rate unchanged at 5.75%. It said the inflation in February 2019 was 0.6% against 0.5% deflation reported for the same month in 2018. As a result the 12-month inflation in 2019 February rose to 1.9%.

According to a Central Bank press release, the economic growth in the fourth quarter of 2018 was higher than expected, driven largely by the growing private consumption. The relatively high economic activity continued into the beginning of 2019, reaching 6.1% in January. The restraining effect of the fiscal policy on domestic demand continues, but according to the Central Bank estimates, it will be neutralized at the end of the first quarter.

The Central Banks said this in mind it favors a gradual restoration of inflation, since low inflation helps ensure long-term inflation expectations and preserve the solvency of income.

Given the above-mentioned trends, the Central Bank decided to maintain the stimulating level of monetary conditions and leave the refinancing rate unchanged.

The regulator also said that given the predicted macroeconomic developments, it will be necessary to maintain the stimulating conditions for a long period. As a result, inflation is expected to remain below the target in the coming months, further stabilizing around the projected band.

On January 29, for the first time in almost two years, the Central Bank of Armenia lowered the refinancing rate by 0.25 percentage points to 5.75%. -0-