Armenia: national currency devaluation resulted in refinancing rate increase

PanARMENIAN.Net - CBA Council increased the refinancing rate and fixed it at 7,75%, CBA Chairman Arthur Javadian declared. According to him, CBA decision was adjusted to deflationary environment crisis and slow rate of growth for domestic demand at the world market , which contribute to formation of low inflation rate. Nevertheless under devaluating currency, risks to exceed the inflation target are becoming real.



The last time CBA increased the refinancing rate was on Feb 10, 2009, when it was lowered by 0,25% and fixed at 6,75%

The dram-to-dollar exchange rate has gone up to AMD 360/$1 in few hours today against yesterday's 305 -310 index for sale and purchase respectively.



Dram/euro exchange rate reached AMD 440 (against 387).



The upsurge followed CB President Arthur Javadian's statement on cessation of control over the foreign currency market and return to floating rate policy.



According to the Central Bank, the dollar exchange rate will fluctuate from AMD 360 to 380 in 2009.