ArmInfo. The Central Bank of Armenia has chosen to keep the refinancing rate at 6.5%. This decision was made on May 5 at the Central Bank of Armenia Board meeting, according to which the rates on Lombard repos (8%) and on deposits from banks (5%) have also been maintained at the previous level.
In total, from mid-2023 to 2026, the key rate has been reduced by 4.25 percentage points (from a historical maximum of 10.75% to 6.5% in December 2025). Accordingly, rates on Lombard repos and on deposits attracted from banks decreased by the same amount (by 4.25 percentage points) over this period, from the maximums of 12.25% and 9.25%, respectively, set in December 2022 (and maintained until June 2023). However, the current levels of the refinancing rate, Lombard repos, and on deposits attracted from banks are far from the minimum levels of 4.25%, 5.75%, and 2.75%, respectively, set in the second half of 2020. According to statistics, inflation in March 2026 compared to March 2025 was 4.5%, against an inflation rate of 3.3% in March 2025 compared to March 2024. The Central Bank's baseline annual inflation rate for March was 4.7%, compared to 2% a year earlier in the same period.
The Central Bank's management will present a detailed rationale for the Board's decision to keep the key rate unchanged this time at a press conference, which will also be broadcast online, today at 2:00 PM.
As a reminder, the Central Bank of Armenia, after raising the key 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, and will continue 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 it was reduced for the second time in a year to 6.5%. This level remains unchanged to this day.
It should be noted that, starting in 2025, the inflation target has been set at 3% with a tolerance of +/- 1 percentage point (versus the previous 4%, +/- 1.5 percentage points). From now on, the Central Bank will 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 to ensure long-term stable economic growth and improved public welfare.
