CBA LEAVES REFINANCING INTEREST RATE UNCHANGED
Noyan Tapan
Dec 06 2006
YEREVAN, DECEMBER 6, NOYAN TAPAN. At the December 5 sitting,
the Central Bank of Armenia (CBA) Board left the CBA refinancing
interest rate unchanged – 4.75%, NT was informed from the CBA
press service. According to the CBA Board, although the inflation
pressures coming from the external sector and related to high
international prices of power bearing substances and some other
goods (particularly granulated sugar) formed this year still remain,
inflation pressures expected to come from this sector in the next 12
months will be milder. A high economic growth continues, mainly in
the construction and service sectors. The expected increase in the
population’s incomes due to the economic development, combined with
growing remittances keep moderate inflation pressures. At the same
time, under conditions of the continuing dramization of the economy
and the seasonal increase in demand for the Armenian dram at the
end of the year, the CBA’s meeting this demand by purchasing foreign
currency will cause a liquidity surplus. The CBA Board takes the view
that neutralization of this suplus is possible at the current level
of the interest rate. If the current prospects of economic development
continue, the CBA Board does not rule out that the interest rate will
be changed in the coming months.