Armenian Central Bank raises refinancing rate by 0.5 p.p. to 5.5%

YEREVAN, January 21, /ARKA/. Armenia’s Central Bank said today it has raised the refinancing rate by 0.5% percentage point to 5.5%. The bank’s press office said the inflation rate rose by 2% in 2009 December from November, dragging the full-year inflation rate up to 6.5%, exceeding the targeted ceiling by 1.0 percentage point.

The Central Bank said against the backdrop of global economic recovery the external inflationary pressure is being accelerated by higher than expected pace of rise of international prices of raw-materials and basic foodstuffs. It said the overall inflationary background is being effected also by recovering domestic economic activity and growing demand.

The Central Bank said as a result of continued inflationary trends and economic recovery expectations the high inflationary environment will be preserved in the perspective future to be reflected in tightening fiscal and credit policy.

Last time the Central Bank raised its refinancing rate on March 3, 2009 by 1 percentage point to 7.75% after it reverted to the floating exchange rate of the national currency Dram. Later it reduced refinancing rate on April 7 to 7.%, then on May 12 to 7.25%. On May 22 it fell by another 1 percentage point to 6.25%. On July 7 the refinancing rate was lowered to 5.5% and to 5% of September 8, 2009. -0-