YEREVAN, AUGUST 4, NOYAN TAPAN. On August 4, 2008, the Central Bank of Armenia (CBA) Board raised the refinancing interest rate by 0.25%, fixing it at 7.5%. According to the CBA PR Service, although a 2.2% fall in prices was registered in July on June 2008, the 12-month inflation grew by almost 1% and made 10.7%. The CBA Board confirmed that although international prices of some foodstuffs continue to have a downward tendency registered in the previous months, this tendency has not been reflected in domestic prices. At the same time, despite the fact that international oil prices somewhat fell since mid July, the uncertainty on further changes in these prices remains. In this regard, the secondary impacts of inflation's potential have not weakened, and they continue to affect prices of non-food commodities and tariffs of services. Taking into account the high inflation rates and considering it important to weaken inflationary expectations and reduce deviations from the target, the CBA Board believes that further changes in the refinancing interest rate will be depend on the speed and amount of the response of domestic prices to the indicated tendencies regarding commodity prices in international markets in the coming months.

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