Central Bank of Armenia Cuts Rate 50bps to 8.00%

The Central Bank of Armenia reduced its key refinancing rate by 50 basis points to 8.00% from 8.50% previously.  The Central Bank Board said in its release "Softening of monetary and credit terms are believed to keep inflation within the projected range of fluctuations creating additional impetuses for growth of economic activity".  The Bank also noted the impact of uncertainty and recent developments in advanced economies, particularly in Europe, and cited deflation risks as it aims to keep inflation within the target range of 4% (± 1.5%)

Previously the Bank raised the refi rate by 25 basis points to 8.50% in April this year.  Armenia reported month on month deflation of -0.6% in August, bringing annual consumer price inflation to 4.8% in August; down from the higher figures seen earlier this year e.g. 9% in May, and 11.5% in March, yet still within the inflation target range of 2.5%-5.5%.  The Armenian economy is projected to grow by 4.6% this year.

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