ARMENIA C.BANK CUTS REFINANCING RATE TO 7.50 PCT
Margarita Antidze

Forex Pros
news/update-1-armenia-c.bank-cuts-refi-rate-to-7.5 0-pct-42928
April 7 2009

YEREVAN, April 7 (Reuters) – Armenia’s central bank said on Tuesday
it had cut its refinancing rate to 7.50 percent from 7.75 percent to
offset weaker financial inflows from abroad and boost the economy.

"Despite a sharp devaluation of the dram currency in March, inflation
was lower than forecast. But a reduction of financial inflows into
the country has accelerated the economic decline," the bank said in
a statement.

"A combination of a cut in interest rates and a boost in volumes is
seen as the most effective policy."

The central bank floated the country’s dram currency at the beginning
of March due to the financial crisis and raised the refinancing rate
by 100 basis points to 7.75 percent.

Consumer price index rose 1.4 percent in March from February this
year. Annual inflation in March was 1.0 percent, the same that a month
before.