ARMENIA POSTS 1.4% INFLATION, DESPITE GLOOMY FORECASTS

ARKA
Apr 9, 2009

YEREVAN, April 9. /ARKA/. Despite forecasted inflationary pressures,
Armenia posted a 1.4% inflation in March, Chairman of the Central
Bank of Armenia (CBA) Arthur Javadyan said Wednesday at Novosti
International Press Centre.

"We expected inflationary pressures in March due to the Central
Bank’s exchange rate adjustments," the CBA chairman said, adding the
1.4% inflation in Armenia last month was due to global inflationary
pressures and slowing demand.

Citing a 1% year-on-year inflation in March 2009, Javadyan said this
week CBA decided to decrease interest rates by 0.25% to 7.5%. "This was
an attempt to give an impetus to financial organizations and public,"
he said, adding the Central Bank had launched an expansion policy.

According to the Central Bank’s quarterly report on monetary and
credit policy, a 3% GDP reduction and 5.9% inflation is forecast in
Armenia by end-2009.

On March 3, CBA officially returned to the floating exchange rate
policy.

Shortly afterwards, AMD/USD exchange rate dropped 66.36pct to AMD
372.11 compared to March 2.

According to the CBA specialists, the average weighed AMD/USD
exchange rate is expected to range from AMD 360 to AMD 380 per $1
this year.