Annual Report 2019
MAINTAINING PRICE
STABILITY
Monetary policy
'or ensuring price stability, the Central Bank is mandated to
F
set a medium-term inflation target and opts for such a target
in order to anchor public expectations and secure a path to
streamlined macroeconomic stability. In the Republic of Armenia, the
inflation target is outlined in the monetary policy programs of the
Central Bank, medium-term expenditures frameworks of the
Armenian Government, the Republic of Armenia laws on state budget
as well as sustainable development projects. The Central Bank is
entitled with operational independence, so it independently decides
on the monetary policy strategy it carries out, the interim and
operational objectives and monetary instruments.
In the context of inflation targeting strategy, a projected
path to bringing inflation to the target serves an intermediate target
and short-term interest rate an operational target for the Central Bank.
Target level of the short-term interest rate is the refinancing rate which
the Board of the Bank sets, normally, eight times in a year according
to a pre-announced timetable and which serves a benchmark for the
Bank's operations in the financial market. The 7-day repo agreement
is the main instrument of monetary policy and is used by the Bank to
manage the liquidity in the financial system.
ANNUAL
REPORT 2019
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