IMF: Armenia's Central Bank should stand ready to adjust its monetary policy stance

14.12.2020 19:27
IMF: Armenia's Central Bank should stand ready to adjust its monetary policy stance

YEREVAN, December 14. /ARKA/. “Armenia's monetary policy has rightly been accommodative, supporting the economy and keeping the banking sector liquid. Inflation remains low, with the exchange rate relatively stable over much of this year,' Tao Zhang, Deputy Managing Director and Acting Chair, said after the IMF Executive Board completed the third review of  Armenia’s performance under the program supported by the Stand-By Arrangement (SBA).

According to him, nevertheless, the Central Bank of Armenia should carefully monitor market developments and stand ready to adjust its monetary policy stance, as necessary, to preserve macroeconomic stability, while maintaining exchange rate flexibility to absorb shocks under its inflation targeting framework.

“Financial sector reforms, some of which are underway, will support the recovery and long-term growth. While the financial system has not shown signs of stress, supervisors should continue to identify vulnerabilities and risk factors in the banking system and stand ready to take relevant regulatory actions,' Tao Zhang said .

In his words, implementation of the authorities’ structural reform agenda remains critical to support the economic recovery and promote inclusive growth. Reform efforts include those to improve the business climate and support SMEs, strengthen the governance framework, and continue support to the health and education sectors.-0-

On October 27, Armenia's Central Bank decided to leave the refinancing rate unchanged at 4.25%. The refinancing rate had been cut by the regulator by 0.25 percentage points on September 15. -0-

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