But there is no universal prescription: each central bank must weigh the local risks that inflation will persist against the threat of deflation from overhanging debt and fragile Banks.

Israel acted in August, raising its key interest rate to 0.75% from 0.5%, responding to signs that the local economy had started growing and to fears that the inflation rate might pick up quickly.

Armenia has also managed to slash inflation, stabilize the local currency (the DRAM), and privatize most small - and medium-sized enterprises.