CBA LEAVES REFINANCING RATE UNCHANGED – AT 7.75%

Noyan Tapan

Nov 4, 2008

YEREVAN, NOVEMBER 4, NOYAN TAPAN. At the November 4 sitting, the
Board of the Central Bank of Armenia (CBA) left the refinancing rate
unchanged, fixing it at 7.75%.

According to the CBA PR Service, 0.7% inflation was recorded in October
on September 2008, as a result of which the 12-month inflation declined
by 2.7 percentage points to 8.6%.

The CBA Board stated that in the third quarter of 2008, the
developments in the external and domestic environments were mainly in
line with the assessments given at the previous sitting on the issue
of rates. In October, the inflationary pressures from the external
environment were affected by the decline of global demand and continued
to weaken, being expressed in further fall of international non-food
commodity prices. The recent months’ tendency of external inflationary
pressures to weaken have become apparent, although not fully, in the
domestic market of Armenia.

Taking into account the considerable fluctuations of prices in
commodity markets under conditions of the international financial
crisis, the duration of the crisis and the uncertainty of time needed
to overcome its consequences, as well as the slow process of inflation
specification in the domestic market, the CBA Board considers it
expedient to keep the refinancing rate at the same level.