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ARMENIA UPS RATE 175 BPS TO ANCHOR INFLATION EXPECTATION
Counting Pips
Dec 23 2014
December 23, 2014
By CentralBankNews.info
Armenia's central bank raised its benchmark refinancing rate by 175
basis points to 8.50 percent to anchor inflation expectations around
its target head and head off inflationary pressures from the recent
rapid depreciation of its dram currency.
The Central Bank of Armenia (CBA), which has raised its rate by a net
75 basis points this year, added that it still expects inflation to
be within its allowable range by the end of a 12-month period.
On Dec. 9 CBA Governor Artur Javadian was quoted as saying the central
bank had stepped up interventions in the local currency market
by selling fixed amounts of U.S. dollars to Armenian banks and he
expected this to end the recent sharp fluctuations in the exchange
rate of the dram.
Javadian attributed a weakening of the dram on Russia's economic woes
- Armenia's major trading partner - with the depreciation of the
ruble triggering panic buying of U.S. dollars in Armenia and other
ex-Soviet states.
The Armenia dram currency started depreciating in late October and the
plunged sharply in late November, hitting a year-low of 490.34 to the
U.S. dollar on Dec. 17. Today it was quoted at 456.17 to the dollar,
down just over 11 percent for the year.
The CBA said today that expectations of rate rises in the United
States has triggered capital outflows from developing countries to
the U.S. while lower oil prices and geopolitical problems affecting
Russia had triggered negative expectations of ruble devaluation.
The CBA has also called on financial market participants to refrain
from currency speculation, with the central bank starting proceedings
against some commercial banks and currency retailers that were likely
to result in fines.
Armenia's headline inflation rate rose slightly to 2.6 percent in
October from 2.15 percent in September and the CBA targets inflation
of 4.0 percent, plus/minus 1.5 percentage points.
The economy of Armenia, located east of Turkey and west of Azerbaijan,
has been hit by the economic crises in Russia but its Gross Domestic
Product still expanded by an annual 5.3 percent in the third quarter,
up from 2.3 percent in the second quarter.
http://countingpips.com/2014/12/armenia-ups-rate-175-bps-to-anchor-inflation-expectation/
Counting Pips
Dec 23 2014
December 23, 2014
By CentralBankNews.info
Armenia's central bank raised its benchmark refinancing rate by 175
basis points to 8.50 percent to anchor inflation expectations around
its target head and head off inflationary pressures from the recent
rapid depreciation of its dram currency.
The Central Bank of Armenia (CBA), which has raised its rate by a net
75 basis points this year, added that it still expects inflation to
be within its allowable range by the end of a 12-month period.
On Dec. 9 CBA Governor Artur Javadian was quoted as saying the central
bank had stepped up interventions in the local currency market
by selling fixed amounts of U.S. dollars to Armenian banks and he
expected this to end the recent sharp fluctuations in the exchange
rate of the dram.
Javadian attributed a weakening of the dram on Russia's economic woes
- Armenia's major trading partner - with the depreciation of the
ruble triggering panic buying of U.S. dollars in Armenia and other
ex-Soviet states.
The Armenia dram currency started depreciating in late October and the
plunged sharply in late November, hitting a year-low of 490.34 to the
U.S. dollar on Dec. 17. Today it was quoted at 456.17 to the dollar,
down just over 11 percent for the year.
The CBA said today that expectations of rate rises in the United
States has triggered capital outflows from developing countries to
the U.S. while lower oil prices and geopolitical problems affecting
Russia had triggered negative expectations of ruble devaluation.
The CBA has also called on financial market participants to refrain
from currency speculation, with the central bank starting proceedings
against some commercial banks and currency retailers that were likely
to result in fines.
Armenia's headline inflation rate rose slightly to 2.6 percent in
October from 2.15 percent in September and the CBA targets inflation
of 4.0 percent, plus/minus 1.5 percentage points.
The economy of Armenia, located east of Turkey and west of Azerbaijan,
has been hit by the economic crises in Russia but its Gross Domestic
Product still expanded by an annual 5.3 percent in the third quarter,
up from 2.3 percent in the second quarter.
http://countingpips.com/2014/12/armenia-ups-rate-175-bps-to-anchor-inflation-expectation/