RA CB leaves refinancing rate unchanged - 6.75%

ArmInfo.  The Central Bank of Armenia still keeps the refinancing rate at 6.75%. This decision was made on August 5 at a meeting of the Board of the Central Bank of Armenia.

In accordance with this, the rates on Lombard repos - 8.25% and on  deposits attracted from banks - 5.25% also remained unchanged.

In fact, after a decrease in February 2025 by 0.25 percentage points  - from 7% to 6.75%, the refinancing rate did not change subsequently.

In total, from mid-2023 to February of this year (thereafter it did  not change), the key rate was reduced by 4 percentage points (from a  historically high of 10.75%). In accordance with this, over this  period, the rates on Lombard repos and on deposits attracted from  banks decreased by the same amount (by 4 percentage points) - from  the maximum of 12.25% and 9.25%, respectively, recorded in December  2022 (and maintained until June 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 June 2025, compared to June 2024,  inflation was recorded at 3.9%, against inflation of 0.8% in June  2024 compared to June 2023. The Central Bank's calculated baseline  annual inflation rate for June was 3.1%, compared to unchanged prices  (0%) a year earlier in the same period.

A detailed justification for the decision of the Central Bank Council  to leave the refinancing rate unchanged this time will be presented  at a press conference today at 14:00 by the Chairman of the Central  Bank Martyn Galstyan. The press conference will also be broadcast  online.

The Central Bank of Armenia, after 2.5 years (from December 2020 to  mid-2023) of increasing the refinancing rate from a minimum of 4.25%  to a maximum of 10.75% (i.e. by 6.5 percentage points), began to  reduce the key rate starting from June 13, 2023, continuing this  policy in 2024 and at the beginning of 2025 - in February from 7% to  6.75%, maintaining this level to this day.

Note that starting from 2025, the target inflation level is set at 3%  with a range of permissible deviations of +/- 1 percentage point  (versus the previous 4%, +/- 1.5 percentage points). The RA Law "On  the State Budget of Armenia for 2025" stipulates that the Central  Bank will henceforth be guided by this inflation target when making  decisions on monetary policy. Reducing the inflation target threshold  is an important prerequisite for the implementation of the joint  approach of the Central Bank and the Government towards the prospects  of long-term stable economic growth and improving the welfare of  society.