Central Bank of Armenia Holds Refinancing Rate at 6.50%

The Central Bank of Armenia held its refinancing rate at 6.50% for Q2 2026, balancing above-target inflation and expansionary demand pressures against weaker global growth and potential domestic disinflationary risks. The central bank had held the rate at 6.75% through November 2025 before cutting it by 25 basis points in December and maintaining the new level thereafter. Annual inflation reached 4.2% in May and core inflation rose to 5.1%, above the medium-term 3% target, while Q1 growth slowed but remained relatively high, supported by construction and services amid strong lending and retail trade. The global outlook deteriorated as geopolitical uncertainty, prolonged high energy prices and weaker demand weighed on growth, while elevated US public debt and long-term interest-rate risks could keep leading central banks’ policy rates high. The Central Bank of Armenia said it would take appropriate policy action to ensure medium-term price stability, with risks potentially requiring either a higher or lower rate path than market expectations.