Armenia hikes refinancing rate from 6.75% to 8.5%
YEREVAN. Dec 25 (Interfax) - The Central Bank of Armenia on December 23 decided to raise the refinancing rate from 6.75% to 8.5% pa, the bank said in a statement.
The Central Bank said that as the United States economy grows, expectations had emerged of further growth in rates, which has triggered capital outflow from emerging markets to the U.S., slowing down economic growth and devaluing the national currencies of emerging markets, including Armenia. Rapid price increases for some goods as the result of the devaluation of the dram, the national currency, has stoked inflationary expectations, and fuelled demand for goods and foreign currency, adding inflationary pressure.
The Central Bank considers the refi rate hike to be a means of mitigating that inflationary pressure and getting inflationary expectations back to a planned 4%, give or take 1.5 percentage points.
The refinancing rate had been 6.75% since September 2014. It has now been altered on five occasions in 2014.
