YEREVAN, JUNE 3, NOYAN TAPAN. At the July 2 sitting, the Board of the Central Bank of Armenia (CBA) raised the refinancing interest rate by 0.25% by fixing it at 7.25%. As Noyan Tapan was informed by the CBA Public Relations Department, a 0.5% inflation was registered in June on May 2008 on the Armenian consumer market, as a result of which the 12-month inflation made 9.6%. Though it continued to reduce being lower by 0.3% as compared with the inflation level recorded in May, nevertheless it exceeds the upper limit of the target level by nearly 4%. The CBA Board stated that in spite of the reduction of international prices for some foodstuffs recorded in the previous months, they have not been reflected on the domestic prices yet, and the speed and amount of that reflection remain vague. Meanwhile, international prices for oil products remain high containing additional inflation risks with both direct and secondary impacts. Attaching importance to reduction of inflation expectations and deviations from the target level, the Board of CBA holds the same opinion that further clarification of the refinancing interest rates will depend on the speed and amount of response of domestic prices to the above mentioned tendencies of goods' prices on world markets.

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