ArmInfo. The Central Bank of Armenia has decided to reduce the refinancing rate by 0.25 percentage points at the end of 2025, from 6.75% to 6.5%, after keeping it unchanged for 10 months. The decision was made on December 16 at the meeting of the Central Bank of Armenia's Board. This is the second key rate reduction in 2025; the previous one was in February 2025, also by 0.25 percentage points, from 7% to 6.75%. Since then, it has been kept at the same level six times (in March, May, June, August, September, and November). In accordance with this, rates on Lombard repos have also been reduced from 8.25% to 8%, and on deposits from banks from 5.25% to 5%.
Since mid-2023, the key rate has been reduced by 4.25 percentage points (from its historical maximum of 10.75%). During the same period, rates on Lombard repos and on deposits from banks have also decreased by 4.25 percentage points, from the maximums of 12.25% and 9.25%, respectively, set in December 2022 (and maintained through June 2023). However, the current levels of the refinancing rate, Lombard repo rates, and bank deposit rates are still above of 4.25%, 5.75%, and 2.75%, respectively, set in the second half of 2020.
According to statistics, inflation in November 2025 compared to November 2024 was 3.1%, compared to 1.4% in November 2024 compared to November 2023. The Central Bank's baseline annual inflation rate for November was 3.8%, compared to 0.8% a year earlier during the same period. Central Bank Chairman Martin Galstyan will present a detailed rationale for the Central Bank Council's decision to lower the refinancing rate at a press conference today at 2:00 PM. The press conference will also be broadcast online.
Recall , the Central Bank of Armenia, after raising the refinancing rate from a minimum of 4.25% to a maximum of 10.75% (i.e., by 6.5 percentage points) for 2.5 years (from December 2020 to mid-2023), began cutting the key rate starting June 13, 2023, continuing this policy in 2024 and 2025. Specifically, in February 2025, the key rate was reduced from 7% to 6.75%, maintaining this level until mid-December, when the second reduction of the year to 6.5% followed.
It should be noted that starting in 2025, the inflation target is set at 3% with an acceptable range of +/- 1 percentage point (compared to 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 monetary policy decisions. Reducing the inflation target 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 improved public welfare.
