Prices Are Decreasing, Risks Remain High: Central Bank President

In February 2024, the year-on-year inflation in Armenia continued to decrease, reaching -1.7 percent. This was stated today by Martin Galstyan, the President of the Central Bank of Armenia, during a press conference.

“Inflationary pressures transmitted from the global economy on the Armenian economy continue to significantly weaken. In the first quarter of 2024, the economic activity of global and major trading partner countries is continuing to slow down, and annual inflation is decreasing,” he commented on the Central Bank Council’s decision to reduce the refinancing rate by 0.25 percentage points.

Despite this, the Central Bank President emphasized that the inflationary environment remains at a high level due to inflationary pressures from the international market. These include disruptions in supply chains due to rising tensions in the Middle East and the worsening of financial-economic problems in China, which pose risks of sluggish global economic growth and price volatility in international commodity markets.

It is recalled that during the meeting on March 12, the Central Bank Council decided to lower the refinancing rate by 0.25 percentage points, setting it at 8.50%. The interest rate on the lombard repo tool provided by the Central Bank is set at 10%, while the interest rate for the monetary absorption tool is set at 7%. The Council considers that a lower refinancing rate is necessary to achieve the medium-term inflation target of 4% and price stability.