CBA BOARD RAISES REFINANCING RATE BY 0.25%, FIXING IT AT 6%

Noyan Tapan
Feb 4, 2008

YEREVAN, FEBRUARY 4, NOYAN TAPAN. At the sitting held on February
4, 2008, the Central Bank of Armenia (CBA) Board raised the CBA's
refinancing rate by 0.25%, fixing it at 6%.

NT was informed by the CBA press service that 2.4% inflation was
registered in Armenia in January 2008 on December 2007, as a result
of which the 12-month inflation made 6.6%, remaining at the level of
late 2007.

The CBA Board takes the view that the high inflation environment,
which formed in global market, is still remaining and creates no
bases for weakening inflation pressures in the domestic economy. At
the same time, developments of the domestic environment will continue
to be conditioned by high rates of private consumption, also being
impacted by the tax and budgetary policy with an expanding effect,
which is expected in 2008. In the opinion of the CBA Board, the
indicated inflation pressures will remain throughout 2008, and it
will be possible to mitigate inflation expectation and keep inflation
within the target level only by gradually tightening the monetary
and credit conditions in Armenia.