The Central Bank of Armenia has raised the refinancing rate to 7%

On November 3, the Central Bank of Armenia announced an increase in the base refinancing rate by 0.25 percentage points to 7.00% per annum. This step is aimed at curbing persistent inflationary pressure in the republic, as reported by Hetq.am.

The refinancing rate serves as a key mechanism of the regulator's monetary policy and determines the base cost at which the Central Bank provides credit resources to commercial banks. This directly affects interest rates on loans for businesses and the population across the country.

The current revision is the second consecutive step in tightening the Central Bank's policy. Previously, on September 15, the regulator had already increased the interest rate by 0.25 percentage points, as a result of which it reached 6.75%. By increasing the cost of funding for commercial credit organizations, the regulator expects to cool consumer demand and stabilize the situation in the domestic market.

In the medium term, the regulator is targeting an inflation rate of 3.00%, however, over the past few months, the growth of consumer prices has exceeded this figure. Thus, annual inflation was 4.50% in August and 4.30% in September. The bank's management cited a complex of external and internal adverse factors that prompted the board to take these measures.

Chairman of the Central Bank of Armenia Martin Galstyan intends to speak to journalists later today. He will provide additional analytical commentary regarding the logic of the monetary decision taken.