Economy 14:25 30/04/2024 Armenia

Armenia's Central Bank reduces refinancing rate to 8.25%

At its meeting on Tuesday, the Board of the Central Bank of Armenia decided to decrease the key policy rate (refinancing rate) by 0.25 percentage points, setting it at 8.25 percent. The Board agrees that a lower refinancing rate is necessary to continue to meet its price stability objective of ensuring an inflation rate of 4 percent over the medium term.

Annual CPI inflation has continued to remain at low levels well below the target, registering -1.2% in March 2024. Core inflation also continued to decrease, at -0.7% year-over-year in March, the Central Bank said in a press release.

In the first quarter of 2024, risks of slowing economic growth globally and in the key trading partner countries of Armenia continue to persist. Global inflation continues to decline, but sticky prices continue to remain relatively elevated in key trading partner economies. At the same time, overheated labor market conditions continue to contribute to sustained high demand conditions in key trading partner economies. Geopolitical tensions in the Middle East since the beginning of the year continue to create risks for future growth in global energy prices and potential disruptions in global supply chains. In this context, it is likely that key trading partner central banks, and in particular the US Fed, would maintain tight monetary conditions for longer. Consequently, weak deflationary effects are expected from the external sector on the Armenian economy.

Economic activity in Armenia remained robust in the first quarter, continuing to be largely driven by meaningful growth in the trade and industry sectors. The latter continues to be impacted by certain short term factors, carrying real uncertainties with respect to the sustainability of economic growth and its long-term outlook. External demand for domestic services is slowing, while high growth in private investments continues to contribute to domestic demand. At the same time, risks for additional demand pressures stemming from fiscal policy continue to persist. The inflationary environment in Armenia continues to remain low, driven by the monetary policy implemented by the CBA in recent years, weak deflationary pressures from the external sector, and the implications of the appreciated dram. At the same time, growth in labor supply has somewhat eased labor market conditions, which has been reflected in cooling wage growth as well as declining non-traded sticky price inflation and inflation expectations.

In the face of high uncertainty, and given its commitment to achieving the price stability objective, the Board considers multiple scenarios during its deliberations. On the one hand, the Board discussed scenarios where possible underlying developments—including tighter monetary conditions in key trading partner countries, as well as uncertainty related to the country risk premium and neutral interest rates—would require a tighter policy stance relative to current market expectations in order to manage risks that threaten the price stability objective. On the other hand, the Board discussed scenarios where potential economic developments—including continued growth in domestic labor supply, as well as a rapid deceleration in demand—would cause inflation to persistently remain at a low level. This would imply a more rapid and aggressive downward path for the policy rate than what is currently priced in markets in order to sustainably bring inflation back to target in the medium-term horizon.

In summary, balancing the aforementioned risks in both directions, the Board of the Central Bank of Armenia finds it appropriate to continue to gradually ease the policy stance. The Board will continue to monitor risk scenarios, and stands ready to take adequate actions to ensure that the price stability objective of 4 percent inflation over the medium-term horizon is met.



Source Panorama.am
Share |
Տեքստում սխալ կամ վրիպակ նկատելու դեպքում, ուղարկեք խմբագրին հաղորդագրություն` նշելով տվյալ սխալը, այնուհետև սեղմելով Ctrl-Enter:

Newsfeed

17:07
Striking ZCMC workers hint at pressure on coordination council members
Employees of Armenia’s Zangezur Copper Molybdenum Combine (ZCMC) continued the strike on Friday, insisting on the restoration of...
16:36
ANCA calls for Azerbaijani accountability at International Religious Freedom Summit panel
In remarks offered at the Capitol Hill opening of the International Religious Freedom Summit Kick-Off Advocacy event, Armenian National...
16:05
Azerbaijan destroys Armenian megalithic monument near Al Lakes
Satellite imagery analysis conducted by the Armenian Cultural Landscape organization reveals that Azerbaijan has destroyed the megalithic...
15:42
Armenian church to hold blessing ceremony for newlyweds on Feb. 14
On February 14, the Armenian Apostolic Holy Church will celebrate the Feast of the Presentation of Infant Jesus to the Temple. In past...
15:14
Azerbaijan uses sham trial of prisoners to target Armenia, MP says
During the sham trial of Armenian prisoners in Azerbaijan, a country that claims to be holding "peace talks" with Armenia, the...
14:35
Boycott of bus fare increase continues in Yerevan
Many commuters continue boycotting a significant increase in public transport fares in Yerevan, citing poor service. Bus fares rose from 100 to...
13:46
Azerbaijan continues to destroy residential areas in Artsakh
Azerbaijan continues to target Armenian residential areas, settlements and cultural monuments in Artsakh (Nagorno-Karabakh), warns Hovik...
13:15
Romanian government blocks Christie's sale of El Greco painting
El Greco’s Saint Sebastian (ca. 1610–14) has been pulled from auction at Christie’s after intervention from the Romanian...
12:58
Striking ZCMC workers demand guarantees from government
The striking employees of the Zangezur Copper Molybdenum Combine (ZCMC) are demanding formal assurances from the Armenian government that their...
12:30
Major crash in Armenia leaves 150 cars stranded
A major road traffic accident in Armenia’s Syunik Province left 150 cars stranded. The crash involving 6 vehicles occurred on the...
11:48
ZCMC workers continue strike despite threats
Employees of Armenia’s Zangezur Copper Molybdenum Combine (ZCMC) continued the strike on Friday despite pressure and threats from the...
11:15
State of emergency declared on Santorini after 7,700 tremors
Greek civil protection authorities have declared a state of emergency on Santorini as natural disaster experts voice mounting fears over the...
11:01
Pashinyan meets with US vice president
Armenian Prime Minister Nikol Pashinyan met with U.S. Vice President James David Vance at the White House in Washington, the Armenian...
17:05
Iranian ambassador comments on US-Armenia strategic partnership deal
Iranian Ambassador to Armenia Mehdi Sobhani commented on the strategic partnership agreement signed between Armenia and the United States in...
16:46
Armenian FM to pay official visit to Norway
Armenian Foreign Minister Ararat Mirzoyan will pay an official visit to Norway on Friday. He is scheduled to meet with his Norwegian...
16:26
False narratives cannot disrupt strong Iran-Armenia ties, envoy says
Iran considers the establishment of a lasting peace and stability in the South Caucasus as its key commitment, Iranian Ambassador to Armenia...
15:46
Trump signs order banning trans athletes from female sports
US President Donald Trump has signed an executive order that prevents transgender women from competing in female categories of sports, BBC...
15:35
Strong winds expected in parts of Armenia
Snow is expected in Armenia on Thursday and in the next three days, with blizzards and low visibility set to hit the country's...
15:06
Acute respiratory infections remain widespread in Armenia
The H1pdm09 subtype of the Influenza A virus continues to circulate in Armenia, along with other respiratory infections, including the...
14:30
Four Yerevan officials remanded in custody
A court in Yerevan has ordered four current and former officials from Yerevan’s municipal administration to be remanded in...
14:00
Baku court to continue sham trial of Artsakh leaders on Thursday
The Baku court is today set to continue preparatory hearings in the sham trial of Artsakh’s former military and political leaders and...
13:33
Armenian economy minister comments on ZCMC workers' strike
Armenian Minister of Economy Gevorg Papoyan on Thursday expressed concern over the ongoing strike by employees of the Zangezur Copper Molybdenum...
12:52
9 prosecuted over deadly shootout in Armenian village
Nine people are facing prosecution in connection with the deadly shootout in Merdzavan, a village in Armenia’s Armavir Province. Three...
12:28
Wolves caught on camera in Armenian state reserve
Wolves have been caught on a trail camera in Armenia’s Khosrov Forest State Reserve. The video was posted on the reserve's...
11:53
ZCMC management again rejects strikers' pay rise demand
The striking employees of Armenia’s Zangezur Copper Molybdenum Combine (ZCMC) on Wednesday again met with the company’s management...
11:28
Armenian GM sole leader of Al-Beruniy International Chess Tournament
Armenian GM Shant Sargsyan is the sole leader of the Al-Beruniy 2nd International Chess Tournament taking place in Uzbekistan....
11:00
White House says it will cancel $8 million in Politico subscriptions
White House press secretary Karoline Leavitt, responding Wednesday to a question about a right-wing conspiracy theory, announced that the...
17:06
Airborne dust levels exceed safety limits in four Armenian cities
From January 25 to 31, air quality monitoring revealed that airborne dust concentrations in the Armenian cities of Gyumri, Ararat and...
16:25
Georgian parliament removes 49 opposition MPs
At a plenary session on Wednesday, Georgia’s one-party parliament voted to strip 49 opposition MPs of their mandates. The decision, backed...
16:06
Yerevan Municipality officials arrested for bribery
Around eight current and former officials of the Yerevan Municipality have been arrested as part of an ongoing criminal probe conducted by...

Follow us and get updates!

Most popular articles

{"core.blocks.header.spell_message1":"Selected mistake: ","core.blocks.header.spell_message2":"Send a message about the mistake?"}