Friday, January 13, 2012

Central Bank of Armenia Holds Interest Rate at 8.00%

The Central Bank of Armenia held its key refinancing rate unchanged at 8.00%.  The Central Bank Board said in its release: "The Board admitted that inflationary pressures coming in to the Armenian economy from external environment in short run are weak: international prices of raw materials and food products fell in December in view of the slowing of the world economy. Nevertheless, world economic developments and possible inflationary pressures therefrom are in the focus of the Central Bank. Inflationary pressures from domestic economic developments are at their smallest as the impact of the fiscal policy and private spending as well as the developments in the labor market on the inflation environment are estimated to be neutral."

Previously the Bank cut the reference rate by 50 basis points at its September meeting in 2011, after last raising the refi rate by 25 basis points to 8.50% in April last year.  Armenia reported annual inflation of 2.5% in December, down from 4.8% in November, the same as 4.8% in August; down from the higher figures seen earlier last year e.g. 9% in May, and 11.5% in March, yet still within the inflation target range of 2.5%-5.5%.  Armenia's currency, the Armenian Dram (AMD), last traded around 388 against the US dollar.


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