ARMENIAN CB REDUCES REFINANCING RATE

ARKA
Apr 7, 2009

YEREVAN, April 7. /ARKA/. At its sitting today the Board of the Central
Bank of Armenia (CBA) decided to reduce the annual refinancing rate
by 0.25% down to 7.5%.

The CBA press service reports that, with the inflation environment
resultant from the declining world and domestic demand, inflation
rates proved to be lower that forecast in Armenia despite the AMD
depreciation during this March.

On the other hand, the further decline in external demand, slackened
financial flows and the persistent unfavorable trade conditions have
speeded up the economic decline.

The CBA Board are unanimous that, with the formed and forecast
macroeconomic developments, reasonably combining the tasks of meeting
the inflation targets and of promoting economic activity implies an
expansionary monetary policy. Therefore, reduced refinancing rates
combined with larger scopes are more effective, the report says.

An inflation rate of 1.4% was registered in Armenia this March against
this February, while the annual inflation rate remained unchanged – 1%.

An inflation rate of 4% (±1.5%) is budgeted in Armenia for 2009.