Tuesday, January 30 2024 13:23

ArmInfo.At its meeting today, the Board of the Central Bank of Armenia decided to reduce the refinancing rate by 0.5 pp, setting it at 8.75%.

"The Lombard repo facility rate at 10.25 %; The Deposit facility rate  at 7.25 %," the press service of the Central Bank reports.

According to statistical data, in Dec 2023 vs. Dec 2022, 0.6%  deflation was recorded, against 8.3% inflation in Dec 2022 vs.  Dec2021. The basic indicator calculated by the Central Bank for 2023  is also deflationary: 0.4%, against 9.5% inflation for 2022.

A detailed justification for the decision of the Central Bank Board  to reduce the refinancing rate today at 15:30 at a press conference  will be presented by the Chairman of the Central Bank, Martyn  Galstyan.

Today at 15:30 at a meeting with journalists, Central Bank President  Martin Galstyan will present the detailed justification of the  Central Bank Board's decision to reduce the refinancing rate.

In 2023 there were five reductions in the refinancing rate - from the  historical maximum of 10.75% to December 9.25%. The Central Bank  began to reduce the refinancing rate from June 13, 2023, first by  0.25 percentage points, then on August 1 - by the same amount, then  on September 12 the decline was more noticeable - by 0.5 percentage  points, after which on October 31 the rate was decreased by 0.25 p.p.  and the same on December 12th. Prior to this, the rate had been  increasing for 2 years, reaching a historical maximum of 10.75% at  the end of 2022 and maintaining this level until June 13, 2023, when  the first reduction took place.

It is appropriate to note that the refinancing rate was increased to  10.75% by the Central Bank on December 13, 2022, and this turned out  to be a new historical maximum after 10.5% in 2015. The previous five  increases took place in 2022 in February - from 7.75% to 8%, in March  - to 9.25%, in August - to 9.5%, in September - to 10% and in  November - to 10, 5%. And from 2021 to December 13, 2022 inclusive,  there were twelve increases in the refinancing rate - from a total of  5.25% to 10.75%. 

Let us recall that in previous years, the historical maximum  refinancing rate was recorded in 2015 - 10.5%, in particular on  February 10, being increased by 1 percentage point - from 9.5% to  10.5%.

Let us recall that in 2021 the Central Bank also increased the  refinancing rate six times:  in February (by 0.25 percentage points -  to 5.5%), in May (by 0.5 percentage points - up to 6%), June (by 0.5  percentage points - up to 6.5%), in August (by 0.5 percentage points  - up to 7%), in September (by 0.25 percentage points - 7, 25%) and in  December (by 0.5 percentage points - 7.75%), according to which  during these periods the rates on Lombard repo were increased by the  same amount - from the initial 6.75% to December 9.25%, and on  Deposit facility rate - from the initial 3.75% to December 6.25%. And  in 2020, the Central Bank revised the refinancing rate, lowering it  four times and increasing it once. In particular, after reducing the  refinancing rate from 5.5% to 4.25% (March, April, June, September  2020), an increase to 5.25% followed in December. The rates on  Lombard repo and on Deposit facility rate underwent a corresponding  change - up to December 6.75% and 3.75%.