CBA REDUCES REFINANCING RATE BY 0.25% TO 7%

Noyan Tapan

Jan 14, 2008

YEREVAN, JANUARY 14, NOYAN TAPAN. At the January 13 sitting, the
Board of the Central Bank of Armenia (CBA) reduced the refinancing
rate by 0.25% to 7%.

According to the CBA PR Service, 0.1% inflation was recorded in
December on November 2008, as a result of which the 12-month inflation
declined by 1.4% to 5.2%. The target index of inflation was ensured.

The CBA Board stated that the external inflation pressures continued
to weaken in December 2008 due to the tendencies to a decline in the
world economic growth rates. These developments continued to become
apparent in the domestic market of food and nonfood commodities,
resulting in a considerable decline of general inflation rates.

The CBA Board believes that despite the uncertainty in further external
and domestic developments, the fall in international prices as a result
of the decline of global demand and its impact on domestic prices will
continue in the forecast period, due to which the fall in inflation
rates will be of a continuous character. Under such conditions the
CBA Board considers it expedient to continue conducting a policy of
weakening the monetary and credit conditions, thus contributing to
the maintenance of economic growth rates in the long term.