On Tuesday, September 10, the Board of the Central Bank of Armenia decided to further reduce the refinancing rate by 0.25 percentage points, setting it at 7.5%.
According to the regulator's statement, the Lombard repo rate was set at 9%, and the rate on funds attracted from banks at 6%.
The Central Bank of Armenia began the cycle of refinancing rate cuts in June 2023. The main goal of these actions is to improve the availability of financial resources in the country's economy amid low inflationary risks.
It is worth noting that prior to this, starting from December 15, 2020, the Central Bank had regularly increased the refinancing rate, raising it from 4.25% to 10.75%. These measures were aimed at curbing inflation in the country.
The current decision to reduce the rate indicates that the regulator considers inflation risks sufficiently controlled and is seeking to stimulate economic activity by lowering the cost of credit.
BMG reminds that in August 2024, inflation in Armenia was 1.3% year-on-year, slightly down from 1.4% in July. The state budget for 2024 sets a target inflation level of 4%, with an allowable deviation of ±1.5%.
The Central Bank of Armenia forecasts inflation at the end of 2024 to be within the range of 0.9-1.3%, for 2025 at 3.2-3.8%, and by 2026 is expected to reach 3.7-4%.
