Armenia's central bank cut its benchmark refinancing rate by a further 50 basis points to 7.75 percent and again held out the prospect of further monetary easing in light of the expected economic developments and the absence of external and internal risks.
The Central Bank of Armenia (CBA), which has now cut its rate by 275 basis points since embarking on an easing cycle in August 2015, added that the deflationary trends in international commodity prices had been replaced by relative stability and it expects the past transfer to domestic prices from lower commodity prices will neutralize in the second half of the year.
In March, when the CBA cut its rate by 25 basis points, it also said it expected to continue to ease its policy stance.
Armenia's inflation rate fell to minus 1.9 percent in April from minus 2.0 percent in March, while inflationary expectations also declined.
The central bank said it expects inflation to gradually return to its target in the second half of its forecast horizon.
In addition, economic activity had shown a significant expansion in the first quarter of this year, helped by rate cuts and government stimulus, leading to an upwards revision in growth forecasts.