A possible sharp increase in Russian natural gas prices due to an increase in the cost of production will inevitably lead to an increase in prices in Armenia, but such an undesirable development of events is extremely unlikely at the moment, governor Martin Galstyan of the Central Bank of Armenia (CBA) announced during a press conference Tuesday.

Reporters had asked the CBA chief about a possible significant increase in Russian natural gas prices in Armenia and the policy to mitigate its consequences. In particular, what measures Armenia’s regulatory body plans to take in such a situation, and how this will affect the country's economy.

"In our main forecasts, the [Russian natural] gas price [in Armenia] is specified in the long term. Since such a development is considered extreme and unlikely, we address such risk scenarios only after they occur, assessing the real impact as necessary," the CBA governor explained.

According to him, now the focus of CBA's attention is mainly on other global geopolitical uncertainties, especially the events in the Middle East and the processes taking place around Iran, which significantly affect international energy prices.

"We [i.e. Armenia] are more concerned about the economic situation of our partner countries and the instability in international relations. For example, when the regional conflict was just beginning, the world price of oil was 60-65 [US] dollars [per barrel], but now it fluctuates between 80-82 dollars, which is about 30-35 percent higher. How long prices will remain at this high level and how this will affect our [Armenian] domestic consumption, time will tell," the CBA head noted.

He added that even if there is a certain easing in US-Iranian relations and peace agreements are reached, energy prices will still remain at their current high level for a long time.

"In this situation, the Central Bank [of Armenia] board is trying to balance bilateral risks. On the one hand, we are dealing with high international interest rates and external inflationary pressures, and on the other hand, possible fluctuations in demand and supply in the domestic market. Our goal is to do everything to ensure price stability in the country in the medium term," Martin Galstyan concluded.