Tuesday, June 11 2024 13:19
Karina Melikyan

Armenia`s Central Bank continues reducing refinancing rate 

Armenia`s Central Bank continues reducing refinancing rate 

ArmInfo.The Central Bank of Armenia continues to reduce the refinancing rate - and this time by  0.25 percentage points - from 8.25% to 8%. The decision to reduce the refinancing rate again was made on June 11 at a meeting of the Council of the Central Bank of the Republic of Armenia. In accordance  with this, rates on pawnshop repo have been reduced by the same amount - from 9.75% to 9.5%, and on deposits attracted from banks - from 6.75% to 6.5%.

According to statistical data, in May 2024. compared to May 2023,  inflation was recorded at 0.3%, against inflation of 1.3% in May  2023. compared to May 2022 The basic inflation indicator calculated  by the Central Bank for May 2024 has not yet been published, but  there are April data, according to which annual deflation in April of  this year. amounted to 0.5% (against annual inflation of 4.3% in  April 2023).

A detailed justification for the decision of the Central Bank Council  to reduce the refinancing rate today at 14:00 at a press conference  will be presented by the Chairman of the Central Bank, Martyn  Galstyan.

Note that the previous reduction in the refinancing rate in 2024 took  place on January 30 - by 0.5 percentage points. from 9.25% to 8.75%,  March 12 - by 0.25 percentage points. from 8.75% to 8.5% and on April  30 - again by 0.25 percentage points. from 8.5% to 8.25%. In  accordance with this, from April 30, rates on pawn repo were reduced  to 9.75%, and on deposits attracted from banks - to 6.75%, from  10.75% and 7.75%, respectively, at the beginning of the year.

Prior to this, in 2023 there were five reductions in the refinancing  rate - from a historical maximum of 10.75% to December 9.25%. The  Central Bank began reducing the refinancing rate on 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. Before 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%.

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 - to 6%), June (by 0.5 p.p. - up to 6.5%), in  August (by 0.5 p.p. - up to 7%), in September (by 0.25 p.p. - 7.25%)  and in December (by 0 ,5pp - 7.75%), according to which during these  periods the rates on pawnshop repo were also increased - from the  initial 6.75% to December 9.25%, and on deposits attracted from banks  - from the original 3 .75% to December 6.25%.  And in 2020, the  Central Bank revised the refinancing rate four times downward and  once upward. 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 pawn repo and on deposits  attracted from banks underwent a corresponding change - up to  December 6.75% and 3.75%.

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