PRESIDENT OF RA CB: A RATHER COMPLEX SITUATION HAS EMERGED IN INTERNATIONAL FINANCIAL MARKETS, AND THIS SITUATION ALSO INFLUENCES ARMENIA
arminfo
2007-11-13 18:26:00
ArmInfo. A rather complex situation has presently emerged in
international financial markets, and this situation also influences
Armenia, President of the Central Bank Tigran Sarkisyan said in the
Armenian National Assembly, Tuesday, presenting the CB’s conclusion
on the 2008 draft budget.
According to him, Europe’s banking structures and the Federal
Reserve System of the USA have to change refinancing interest rates
roughly. In particular, the USA with the lowest 1% interest rate had
to increase it sharply, which couldn’t but influence the situation in
the international financial market, and, all the more, the interest
rates of commercial banks and the rate of the American currency
against other currencies. On the other hand, in the international
market a tendency of price jump, firstly of raw materials and fuel,
as well as of food, is observed. Prices in the international market
rose by 35%-40%, on average. Butter, dairy products, grain, bread
and flour are among these foods. It natural that this reflects upon
Armenia, too, and in the Armenian market, too, price rise is observed,
which negatively affects inflation developments. Thus, Armenia imports
about 60% of bread and grain, and the price rise, of fuel inclusive,
affected the price rise within the republic. This will also reflect
upon the 2008 indicators of price rise.
The authority’s challenge is to alleviate these expectations. It
is particularly important that these inflation developments weren’t
cyclic and didn’t influence the consumer goods basket. In this respect,
the CB proposed to keep the 4% (plus/minus 1,5%) upturn in inflation
in the next 3 years.
The CB plans to tighten its monetary policy, which will lead to rise in
refinancing interest rates. Earlier these measures were periodically
taken and were directed to the tightening of monetary aggregates, and
in this way, alleviated the expectations for price rise. T. Sarkisyan
expressed hope that they will succeed to solve this problem in 2008.