ArmInfo. The Eurasian Development Bank predicts that in December of this year, the Central Bank of Armenia will make another reduction in the refinancing rate. This is stated in the weekly macro review of the Bank, presented on November 4 on the EDB page in Telegram - channel.
As noted in the macro review, at the meeting on October 29, the Central Bank of Armenia reduced the refinancing rate by 0.25 percentage points - to 7.25%. "The decision was made in the context of a weak inflationary background, which is due to a decrease in international prices for goods and raw materials, a slowdown in wage growth and inflation expectations.
Consumer prices grew by 0.6% y/y in September after 1.3% y/y in August. Given that inflation is persistently below the target range of the Central Bank of Armenia (4 + 1.5%), we expect another reduction in the refinancing rate in December," the Bank said in a statement.
Earlier, ArmInfo reported that on October 29, the Central Bank of Armenia decided to reduce the refinancing rate, this time by 0.25 percentage points - from 7.5% to 7.25%. This is already the seventh reduction in the key rate this year, by a total of 2 percentage points (from 9.25% in December 2023).
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 an inflationary 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 a deflationary 0.1% a year earlier.
