At the August 14, 2018 sitting, the Board of the Central Bank decided to leave the refinancing rate unchanged at 6.0%.

According to the report of the Public Relations Service of the Central Bank of Armenia, in July, 2018 1.2% deflation was registered, against 2.6% deflation in the same month of the previous year, in which the 12-month inflation slightly increased by 2.3% at the end of the month. At the same time, the natural increase in July slightly dropped, remaining relatively high. The CB Board estimates that the 12-month inflation in the upcoming months will reach the target index.

Global growth trends continued in the external sector, and comparable inflation developments were recorded in international markets. According to the CB Board, in a number of countries of the region, under the US commercial restrictions and sanctions, there has been a rise in financial markets volatility, which currently does not have significant risks for the Armenian financial markets, but in case of any risk, the CB will respond adequately.

The Council notes that in 2018, due to the acceleration of the processing industry and agriculture growth in June, economic activity was restored after the slowdown at the beginning of the second quarter. The CB Board considers that in the near future the gross demand will gradually weaken due to fiscal policy restraint, which is reflected in the considerable savings cost compared to the planned ones.

Taking into consideration the expected developments, slowdown in domestic demand and the weak inflationary environment of the outside world, the CB Board considers it appropriate to maintain favorable monetary and credit conditions, leaving the current level of refinancing rate unchanged.

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