Yerevan /Mediamax/. Board of the Central Bank (CB) of Armenia made a decision today to leave the refinancing rate unchanged at the level of 7.25%.

Mediamax was informed in CB press service that in December, 2010, as compared to the previous month, inflation at the volume of 1.8% was registered, as a result of which the annual inflation in 2010 made 9.4%. 

CB Board stated that the high level of 12 month inflation continues to be conditioned by the increase of prices in international and Armenian foodstuffs markets: the share of price growth for foodstuffs in annual inflation made 7.5 percentage points, at the 5 percentage points were secured by the growth of prices for fruits, vegetables, meat products, eggs and dairy products, and 3 percentage points – growth of prices for imported foodstuffs. 

CB Board believes that external inflationary pressure gradually intensifies, and this is conditioned by preservation of tension on the basic global foodstuffs markets, which, along with developments in agricultural sectors of Armenia in 2010 (decline in the sector in January-November made 14.5%), continues forming inflationary expectations and secondary effects in the local market. Nevertheless, CB Board considers reoccurrence of last year’s scenario in agricultural sphere of Armenia and the growth of inflationary pressure conditioned by it unlikely. 

Besides, according to the members of the CB Board, the slow reestablishment of the aggregate demand does not provide for inflationary pressures yet, but, nevertheless, the risks that inflation will exceed the upper limit of the target corridor are preserved. 

CB Board still considers toughening of monetary-credit policy likely, taking into account the lags of influence of monetary-credit policy on the aggregate demand, factors of offer and manifestation of their secondary influences, as well as the uncertainty in the sphere of agriculture.