Armenian central bank cuts key refinancing rate by 50 basis points

By bne IntelliNews November 11, 2015

The Central Bank of Armenia cut its key refinancing rate by 50 basis points down to 9.75% on November 10, citing a slow economic growth and a drop in commodity prices on the global market.

This is the second cut in the past three months: the regulator cut the rate by 25 basis points to 10.25% on August 11. It raised the rate from 9.5% to 10.5% in February on the back of high inflation.

Inflation in Armenia reached 1.9% in October, down from 3.3% in September. The regulator expects the deflationary effect of commodity prices and slow economic growth to continue in the coming months, and prices of seasonal agricultural products, an important source of livelihood in Armenia, to drop this autumn.

The mining and agricultural sectors were important contributors to Armenia's 3.7% GDP growth between January and September, according to the central bank.

Inflation is expected to remain below the 2.5- 5.5% target in the coming months, and to pick up in 2016.

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