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5 May 2009 - 16:32 AMT

Armenia’s Central Bank doesn’t intend to reduce refinancing rate

The Central Bank of Armenia is not going to reduce the refinancing interest rate, said Arthur Javadyan , chairman of the Central Bank of Armenia, answering the question of PanARMENIAN.Net reporter.

“I don’t think it’s necessary, since we have not had such a deflationary pressure as other countries have had as yet,” he said. According to Mr. Javadyan, in many countries central banks have reduced refinancing rates due to severe deflationary pressure.

“We expected inflationary pressure within Мarch in connection with implemented by CB currency adjustments. However, world deflationary pressure and reduction in demand have resulted in 3.2 per cent inflation in April in Armenia,” said Javadyan.

As he also mentioned, necessity of reducing the refinancing rate may be conditioned by further evolution of the world financial and economic crisis, including inflation rate in the country, macroeconomic indicators and a number of other factors.

In her turn the head of the public relation department Zaruhi Bardeghyan added, this issue is discussed at the Board of the Central Bank every month.

On April 7 the Board of the Central Bank made a decision to reduce the refinancing interest rate by 0.25 per cent up to 7.5 per cent.

On March 3 Armenia’s Central Bank declared about returning to the floating rate policy. According to estimations of CB experts, weighted average exchange rate is expected to remain within a rate corridor between 360 and 380 AMD for 1 USD in 2009.