13th May 2014
Armenia’s central bank cut its benchmark rate by 25 basis points to 7.25 percent and repeated that it expects inflation to fall in the third quarter of the year to the lower limit of the bank’s tolerance range.
But the Central Bank of Armenia, which has now cut rates twice this year by a total of 50 basis points, added that inflation should start to recover in the second half of the year due to an expected expansion of fiscal policy that should support aggregate demand and inflation.
Armenia’s inflation rate rose to 4.4 percent in April from 3.78 percent in March, continuing the decline since hitting a 2013 high of 9.24 percent in August 2013. The central bank targets inflation of 4.0 percent, plus/minus 1.5 percentage points.
Armenia’s economy is being hit by the slowdown in Russia and the central bank said it expects a period of low economic growth to continue, mainly due to the slow pace of recovery in the construction sector and industry.
The Gross Domestic Product of Armenia, located to the east of Turkey and west of Azerbaijan, grew by an annual 5.2 percent in the fourth quarter of 2013 for full-year growth of 3.2 percent.
In February the central bank forecast 2014 growth of between 5.4 percent and 6.1 percent, mainly due to better output from industry and services. The International Monetary Fund forecasts 4.3 percent growth this year and 4.5 percent in 2015.
Armenia Central Bank cuts Interest rate 25 bps in the last week of December 2013 : December2013Review
24th December 2013
Armenia’s central bank cut its benchmark refinancing rate by another 25 basis points to 7.75 percent and said monetary policy would be weakened further in 2014 given the external and domestic economic developments and a further reduction in inflation.
The Central Bank of Armenia (CBA) cut its rate by 50 basis points in November, reversing a rate rise in August for a net cut in rates this year of 25 points.
Armenia’s inflation rate eased to 6.6 percent in November from 7.14 percent in October, a faster decline than forecast, and the CBA said it expects inflation to reach the upper limit of the bank’s inflation target range by the end of the year.
The bank expects inflation to continue to decline in coming months and return to the bank’s 4.0 percent target within a 1.5 percentage point band.
Armenia’s Gross Domestic Product expanded by an annual rate of 1.4 percent in the third quarter, up from 0.6 percent. Last month the central bank forecast economic growth this year of 3.4-3.8 percent, down from the government’s original 6.2 percent growth forecast.
The bank’s president also announced in November that the central bank would be adopting an inflation targeting policy.