- Decision
- Maintain
- Rate change
- 0 bps
- refinancing rate
- 6.75%
The Board of the Central Bank of Armenia on 18 March 2025 kept the refinancing rate at 6.75 percent, citing headline CPI at 2.5 percent and core inflation at 1.5 percent in February—both near the 3 percent target—and a balance of heightened global inflation risks and slowing external demand. Following a 25 bp cut in February that set the current level, the Board judges domestic activity to be around its sustainable trend, with growth driven by construction, services and trade, cooling labour markets and neutral demand pressures, though fiscal policy could still stoke consumption. Persistently weak external disinflationary impulses reflect only gradual policy easing abroad amid sticky prices, while geopolitical tensions, supply-chain disruptions and US fiscal uncertainty pose upside inflation and risk-premium threats. Reaffirming its commitment to the 3 percent medium-term target, the Board signalled readiness to move the policy rate higher or lower as scenarios unfold but, for now, sees the current stance as broadly in line with market expectations of a gradual easing path.
Rate evolution
After keeping the policy rate at 6.75% through a prolonged pause, during which it noted high activity in construction and services and a recovery in external demand but judged demand to be neutral for inflation, the Central Bank of Armenia cut it by 25 basis points to 6.50% in December. It balanced risks from stronger demand, a higher neutral rate and global inflation against weaker global or domestic demand, a real-estate adjustment and a lower neutral rate.
The December cut followed a decline in annual CPI inflation to 3.1% in November and weaker fiscal demand risks, while the Board continued to flag uncertainty around global growth, United States trade and fiscal policies, and external and domestic demand. On February 3, 2026, the Central Bank of Armenia held the policy rate at 6.50% as annual CPI inflation declined to 3.3% in December while annual core inflation accelerated to 4.3%, economic activity strengthened and demand remained neutral for inflation. It maintained the rate on March 17 and May 5 as annual CPI inflation reached 4.5% in March, core inflation stood at 4.7%, and strengthening domestic and external demand made aggregate demand expansionary, then held again on June 16 and August 4 as inflation and core inflation remained elevated and it weighed excess demand and inflation expectations against weaker global growth, export-market difficulties and a lower country risk premium. On September 15, the Board raised the policy rate by 25 basis points to 6.75% as 12-month inflation remained above target at 4.4% in August and core inflation stood at 4.8%, prioritizing risks from excess domestic demand, expanding external demand and rising inflation expectations while noting weaker global growth, disinflationary risks from export restrictions to Russia and a lower country risk premium.