YEREVAN. - At today’s session, the Central Bank of Armenia (CBA) decided to lower the refinancing rate by 2.25 percentage point down to 8.5 percent.

Rate of lombard repo and means attracted from banks constituted 10 and 7 percent respectively. Weakening of money and credit conditions proved possible due to the low inflation situation, the Central Bank statement reads.  

In January 2016, 2.2 percent inflation was recorded against 2.5 percent in 2015.  Consequently, 12-months inflation slightly lowered, constituting 0.4 percent by the end of the month. The inflation is low mainly due to the lowering of fruit and vegetable prices and price impact on global markets.

The growth of global economy has remained low, whereas the lowering of prices in commodity markets continued. According to the assessment of the Council of Central Bank, the situation will remain the same during the coming months, this contributing to the reduction of prices.

The economic growth in 2015 is assessed at 3.2 percent, mainly due to the growth in agriculture and mining sectors. Although during the year the Central Bank and the Government ran stimulating policy, the internal demand remains weak.

The low inflation will contribute to maintaining purchasing power of incomes, as well as gradual reduction of inflation expectations.  

In these conditions, the CBA considers it relevant to continue the weakening of monetary and credit conditions.