15:59, 2 November, 2021

YEREVAN, NOVEMBER 2, ARMENPRESS. 3 main factors affect the level of current inflation in Armenia: the first one is the increase of prices in the world market, the second one is the obstruction of cargo transportation, logistic chains and the third one is the higher demand for production supply in Armenia, President of the Central Bank Martin Galstyan said today.

Asked to what extent the exchange rate affects the level of inflation, prices now, the CBA chief said: “We have a freely floating exchange rate. At this moment the exchange rate is around 480 drams. It has some affect on prices”.

However, according to the CBA observations, the exchange rate has no major effect on most product groups.

The CBA President proposed to look at the inflation gap to see the reasons for inflationary developments. “We will see three main factors affecting the current level of inflation. The first one is the price increase conditioned by supply factors. There is an increase in prices of food and other types of food in the global market. The second one is a result of obstruction of cargo transportation and logistic chains. And the third factor is a somewhat more advanced increase in the demand for the production supply as a result of which we have the level of inflation which we have today – 8.9%”, he said.

Commenting on the price of sugar, he said at this moment the sugar prices are higher by nearly 50% in the global market compared to December 2019. “This is a more serious factor, than the exchange rate”, he noted.

Editing and Translating by Aneta Harutyunyan