The Central Bank Board left the refinancing rate unchanged at 5.75%.

2019 at the session of July 30, the Central Bank Board decided to leave the refinancing rate unchanged at 5.75%. This was reported by the press service of the Central Bureau of Investigation.

2019 June saw a 1.9% deflation, compared to 1.6% in the same period last year, with 12-month inflation falling to 2.5% due to a deeper seasonal decline in agricultural prices. At the same time, normal inflation increased slightly during the month.

In the external sector, the trends of slowing down the growth of the world economy and weakening of demand are maintained, under which the main partner countries of RA

In the near future, the Central Banks will conduct a policy of loosening monetary conditions. In this situation, the inflationary environment in the international markets of basic food and raw materials also continues to be weak, in which case the Central Bank Board estimates that inflationary pressures are not expected from the external sector in general.

The council notes that in the second quarter, in line with expectations, high growth rates of economic activity were maintained due to the growth of private consumption. The impact of the fiscal policy implemented in the second quarter of the year on domestic demand is estimated to be a significant deterrent. It is expected that in the second half of the year it will be expanding, as a result of which the restraining effect of the fiscal policy on the aggregate demand will be significantly reduced as a result of the year.

In the current situation, the Central Bank Board, giving preference to the gradual recovery of inflation, finds it appropriate to maintain the current monetary conditions, leaving the refinancing rate unchanged. At the same time, in case of forecasted macroeconomic developments, it will be necessary to maintain the stimulating position for a long period of time in order to achieve the inflation goal in the medium term. As a result, inflation is expected to remain below the target level in the coming months, stabilizing around it in the medium term.

It should also be noted that the risks of deviation from the predicted trajectory of inflation are mainly in the direction of decrease, due to the developments of the outside world and the behavior of the state budget, in case of which the Central Bank is ready to respond accordingly, ensuring the stability of prices in the medium term.

You can familiarize yourself with the detailed information underlying the determination of the interest rate level until 2019. In the Press Release to be published on August 13 (Interest Rate Protocol).