Tuesday, December 23 2014

Isahakyan Gayane

Central Bank of Armenia raises refinancing rate from 6.75% to 8.5%

The Central Bank of Armenia has raised
the refinancing rate from 6.75% to 8.5%. The CBA press service has told ArmInfo
that the Megaregulator took the decision to raise the rate by 1.75 pct points
on December 23.   


The source
says that the Lombard repo and deposit rates were fixed at 20% and 7%,


To recall,
since September till now the CBA retained the refinancing rate at 6.75%, having
reduced it to that level on August 12 (from 7%). The Dec 23 rise inclusive, the
refinancing rate has been changed for five times throughout 2014. In the
meantime, the CBA has raised the Lombard repo rate only twice, particularly,
from 10.25% to 21% on Dec 3 and from 8.25% to 10.25% on Nov 24.


To note, from Oct through Dec 17 AMD dropped against
USD by almost 45% and the exchange rate made up 570 AMD/1USD, but on Dec 18-20
the AMD rose against USD by almost 25%, with the exchange rate dropping to 455
AMD/1USD. Afterwards, the AMD again dropped and the exchange rate rose to 465
AMD/1USD on Dec 23. According to the CBA's statement dated 8 December 2014, on
8 December, the Central Bank of Armenia launched daily interventions to restore
the balance in the exchange market and the soften currency fluctuations. On Dec
17, the CBA toughened the forex reserve ratio from 12% to 24%. These measures
were complemented by the refinance rate growth on Dec 23.

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