ArmInfo. The Central Bank of Armenia continues to reduce the refinancing rate, this time also by 0.25 percentage points - from 7.5% to 7.25%. This is the seventh reduction in the key rate this year, by a total of 2 percentage points (from 9.25% in December 2023).
The decision to reduce the refinancing rate again was made on September 29 at a meeting of the Board of the Central Bank of Armenia. In accordance with this, the rates on Lombard repos have been reduced by the same amount - from 9% to 8.75%, and on deposits attracted from banks - from 6% to 5.75%. Thus, over more than a year and a half, the regulator has reduced the key rate by 3.5 percentage points, in accordance with which the rates on Lombard repos and on deposits attracted from banks have decreased by the same amount - from the maximum of 10.75%, 12.25% and 9.25%, respectively, recorded at the beginning of 2023.
But for now, the current levels of the refinancing rate, rates on Lombard repos and on deposits attracted from banks are far from the minimum levels of 4.25%, 5.75% and 2.75%, respectively, recorded in the second half of 2020. According to statistics, in September 2024, compared to September 2023, inflation was recorded at 0.6%, against inflation of 0.1% in September 2023 compared to September 2022. The basic annual inflation rate calculated by the Central Bank in September 2024 was 0.7%, against the deflationary 0.1% a year earlier. The detailed rationale for the decision of the Central Bank Council to reduce the refinancing rate will be presented today at 14:00 at a press conference by the Chairman of the Central Bank Martyn Galstyan.
The previous reductions in the refinancing rate in 2024 took place on January 30 - by 0.5 p.p. from 9.25% to 8.75%, on March 12 - by 0.25 p.p. from 8.75% to 8.5%, on April 30 - again by 0.25 p.p. from 8.5% to 8.25%, on June 11 - again by 0.25 p.p. from 8.25% to 8%, on July 30 - again by 0.25 p.p. from 8% to 7.75%, and on September 10 - again by 0.25 p.p. from 7.75% to 7.5%. In accordance with this, the rates on Lombard repos were reduced from January to September to 10.75% to 9%, and on deposits attracted from banks - from 7.75% to 6%.
Before this, in 2023, there were five reductions in the refinancing rate - from the historically maximum 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 decrease was more noticeable - by 0.5 percentage points, after which on October 31 the rate was reduced by 0.25 percentage points and by the same amount on December 12. Before this, the rate increased 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.
The refinancing rate was raised 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 and including December 13, 2022, there were twelve increases in the refinancing rate - a total of from 5.25% to 10.75%. Let us recall that in previous years, the historical maximum of the refinancing rate was recorded in 2015 - 10.5%, in particular on February 10, having been increased by 1 percentage point - from 9.5% to 10.5%.
In 2021, the Central Bank also raised the refinancing rate six times: in February (by 0.25 p.p. - to 5.5%), in May (by 0.5 p.p. - to 6%), June (by 0.5 p.p. - to 6.5%), in August (by 0.5 p.p. - to 7%), in September (by 0.25 p.p. - 7.25%) and in December (by 0.5 p.p. - 7.75%), in accordance with which during these periods the rates on Lombard repos were increased by the same amount - from the initial 6.75% to 9.25% in December, and on deposits attracted from banks - from the initial 3.75% to 6.25% in December. And in 2020, the Central Bank revised the refinancing rate four times downwards and once upwards. In particular, after the refinancing rate was reduced from 5.5% to 4.25% (March, April, June, September 2020), it was increased to 5.25% in December. The rates on Lombard repos and on deposits attracted from banks underwent a corresponding change - to 6.75% and 3.75% in December.
