Today the Central Bank of Armenia has decided to leave the refinancing rate unchanged at 6%.

According to the Central Bank, in 2017, The 12-month inflation at the end of the second quarter was 1.1%, which was 0.3 percentage points higher than the expected level of the monetary policy program for the second quarter. In July, 2.6% deflation was registered, due to the seasonal downturn in agricultural products, in which the 12-month inflation slightly dropped by 0.9% as of the end of July.

The prospects for improving the global economy have been maintained in the external sector, and prices in international commodity markets have been stable. Based on this, the CB Board expects no significant inflationary effects from the external sector in the coming months.

CB Board states that in the second quarter of 2017, the high economic activity and recovery rates of domestic demand have been maintained by the fact that, under conditions of restraint fiscal policy, the expansionary monetary policy continues to contribute.

According to the report, in this situation, the CB Board finds it expedient to keep the monetary conditions unchanged, as a result of which the inflation will gradually increase. At the end of 2017 it will be set in the range of vibrations, and the target will be stabilized in the forecast horizon. The CB Board considers that in the case of macroeconomic developments with predictable scenario, monetary conditions will remain for some time promoting.

At the same time, in case of deviation risks from the perspectives of economic development and inflation trajectory, the Central Bank will clarify the monetary policy directions in the medium term by ensuring inflation targeting.

Let us remind you that the last change of interest rate is expected on February 14th, 2017.

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