By Mark Dovich
Armenia’s Central Bank has lowered its benchmark interest rate for the first time in more than two years, as inflation in the country continues to ease. In a short statement Tuesday, the bank’s board said it had cut the interest rate by 0.25 points to 10.5%.
Armenia’s annual inflation fell to just 1.3% last month, down sharply from 8.6% last year and well below the Central Bank’s 4% target for this year. Prices for food and fuel are down significantly year-on-year, according to the Statistical Committee, while costs for services continue to rise amid strong consumer demand.
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The Central Bank hiked interest rates six separate times last year, most recently in December, in an attempt to curb rising inflation. Monetary authorities often raise rates when they believe the economy has become overheated and prices are growing too quickly.
