By Alexander Tagvoryan

YEREVAN, July 14–The Central Bank of Armenia released a statement announcing that it has left the refinancing rate unchanged at 7.25 percent.

In June 2010, the deflation against May of the same year was at 0.8 percent. The inflation rate during the 12 months amounted to 5.8 percent, which is 0.5 percent lower than the same index of the previous year.

The Central Bank board says that since the beginning of the year the money-and-credit terms were toughened, the international prices for raw materials and foodstuffs have fallen and the influence of the expansionary monetary and fiscal policies in 2009 have decreased. As a result of all this, the 12-month inflation was reduced at a higher rate than it was expected.

The specialists of the Central Bank say that these factors will continue to dominate in the nearest future, but, despite that fact, the gradual recovery of the aggregate demand in 2010 and the price dynamics on seasonal agricultural products are thought to form inflationary pressures.

The future “behavior” of the European currency and the international prices of raw materials and foodstuffs remains uncertain. That is why the Central Bank thinks it’s better not to make any changes in the monetary conditions.

Yerevan Report