The Central Bank of Armenia lowered its key refinancing rate to seven percent, down 0.25 percentage points, on Tuesday.

The central bank reported deflation of 0.8 percent in May, bringing the 12-month inflation rate at the end of the month to 3.6 percent. It said the inflationary environment will continue to weaken in the next months as the impact of higher energy tariffs that came into effect last July is eliminated, ARKA reports.

The bank also said that growth in the first half of this year is within its projected range, with higher-than expected expansion in the agriculture and service sectors making up for weak performance in the industrial and construction sectors.

"In this situation, the Central Bank considers it expedient to continue easing of monetary conditions by lowering the refinancing rate," the central bank said, according to ARKA.

The bank last lowered its refinancing rate by 0.25 percentage points on May 13.