- Decision
- Maintain
- Rate change
- 0 bps
- refinancing rate
- 6.5%
The Board of the Central Bank of Armenia on 4 November 2025 left the refinancing rate at 6.75 percent, with the deposit and Lombard repo facility rates steady at 5.25 percent and 8.25 percent respectively, judging that accelerating headline inflation to 3.7 percent y/y in September and core inflation at 3.5 percent, alongside robust but supply-driven economic activity and persistent global inflation risks, outweighed still-neutral domestic demand and a weakening external growth outlook. After a 25 bp cut in February, the policy rate has been unchanged at 6.75 percent through successive meetings. The corridor around the policy rate is maintained via the unchanged supporting facility rates. Domestically, economic activity expanded by 10.5 percent y/y in September, powered by construction and services, while wage growth and inflation expectations have stabilised and the output gap is assessed as neutral; fiscal policy could yet add demand pressure. Externally, oil and food prices are softening but geopolitical tensions and volatile global trade policies keep inflation uncertainty elevated, and partner-country growth is faltering. The Board noted that market pricing anticipates a gradual 25–50 bp easing over the next year but weighed upside risks to the neutral rate against downside risks from a potential demand slowdown; it reiterated its readiness to adjust the stance to secure the 3 percent medium-term inflation objective.
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.