ARMENIAN CB LEAVES ANNUAL REFINANCING RATE UNCHANGED

ARKA News Agency
Jan 7 2008
Armenia

YEREVAN, January 7. /ARKA/. At its sitting on December 29, 2007,
the Board of the Central Bank of Armenia (CBA) decided to leave the
annual refinancing rate unchanged – 5.75%.

The CBA press service reports that the CBA believes that external
inflationary pressures were maintained at the end of the 4th quarter
despite some price stabilization on the world food and oil markets.

Weaker internal influence on inflation was recorded as well, as high
rates of individual consumption were neutralized by a more restrained
fiscal policy.

The CBA Board members are of the unanimous opinion that external
inflationary pressure will be maintained this year. However, if no
external shocks occur, external influence on inflation will be weaker
than in 2007. As regards factors of internal influence on inflation,
they will also depend on budget expenditures in the context of the
expected high rates of increase in individual consumption.

The CBA reports that, in case internal and external inflationary
pressures are maintained during the next few months, the CBA Board
will have to be consistent in correcting interest rates.

1.5% inflation was recorded in Armenia in December 2007 compared to
November 2007. As a result, 6.6% annual inflation was recorded in
December 2007 – 1% higher than that the planned inflation (4±1.5%).

–Boundary_(ID_t+OdAoUen7F+hv7MRt4 qBw)–