Why the Refinancing Rate Remains Unchanged: CBA President Explains

Today, in a meeting with journalists, the President of the Central Bank of Armenia, Martin Galstyan, explained why the central bank has once again left the refinancing rate unchanged at 6.75 percent.

According to Galstyan, given the current macroeconomic developments, participants in the Armenian financial market generally expect that the Central Bank will gradually reduce the refinancing rate to between 6.25 and 6.5 percent in the medium term.

“The Central Bank, in discussing the possible rise of global neutral interest rates related to fiscal policies—specifically mentioning the United States—along with the risks of excess domestic demand conditions that require a path of higher refinancing rates compared to market expectations, decided to keep the rate unchanged,” he stated.

The CBA president also mentioned that the lombard repo rate provided by them stands at 8.25%, while the interest rate on resources attracted from banks is 5.25%.

Presenting the Central Bank of Armenia's report on transparency in monetary policy, Galstyan noted that in the third quarter of 2025, the year-on-year inflation rate had slightly accelerated to 3.7 percent in September.

“In the third quarter of 2025, economic activity in Armenia increased, significantly supported by strong growth in construction and services, as well as the influence of certain short-term non-structural factors. There has also been an increase in external demand for local goods and services,” Galstyan highlighted.

He assured that the Central Bank Council will continue to closely monitor economic development scenarios and is prepared to take appropriate actions to stabilize inflation at the 3 percent target in the medium term.

It is noteworthy that the refinancing rate is also the Central Bank's main tool for regulating the financial market and the economy. By increasing or decreasing that rate, the Central Bank also influences inflation.