Potential for a refinancing rate cut in Armenia limited by risks of accelerating inflation – EDB
10.11.2025,
11:03
The potential for a further reduction in the refinancing rate in Armenia is limited by the risks of accelerating inflation due to rising domestic demand, according to the Eurasian Development Bank (EDB) weekly macroeconomic review.
YEREVAN, November 10. /ARKA/. The potential for a further reduction in the refinancing rate in Armenia is limited by the risks of accelerating inflation due to rising domestic demand, according to the Eurasian Development Bank (EDB) weekly macroeconomic review.
The study indicates that inflation in Armenia slowed to 3.7% y/y in October after 3.8% y/y in September.
"Food products (+5.6% y/y) remain the main driver of price growth, driven by global price dynamics. Inflation in the services sector accelerated to 2.9% y/y, while in the non-food segment it remained stable at 0.9% y/y," the review notes. Since June 2023, the Central Bank of Armenia has been continuously lowering the key interest rate, gradually lowering it from 10.75% to 6.75% in February 2025. Since then, the rate has remained unchanged, including the regulator's previous decision on November 4 of this year.
The Central Bank's decision coincided with the forecast recently given by Freedom Broker Armenia to the ARKA news agency. Analysts note that the rational "wait and see" policy gives the Central Bank room to maneuver: if inflation accelerates or volatility in the foreign exchange market emerges, the regulator reserves the right to tighten conditions, and if data shows a further cooling, it will consider a reduction.
The study indicates that inflation in Armenia slowed to 3.7% y/y in October after 3.8% y/y in September.
"Food products (+5.6% y/y) remain the main driver of price growth, driven by global price dynamics. Inflation in the services sector accelerated to 2.9% y/y, while in the non-food segment it remained stable at 0.9% y/y," the review notes. Since June 2023, the Central Bank of Armenia has been continuously lowering the key interest rate, gradually lowering it from 10.75% to 6.75% in February 2025. Since then, the rate has remained unchanged, including the regulator's previous decision on November 4 of this year.
The Central Bank's decision coincided with the forecast recently given by Freedom Broker Armenia to the ARKA news agency. Analysts note that the rational "wait and see" policy gives the Central Bank room to maneuver: if inflation accelerates or volatility in the foreign exchange market emerges, the regulator reserves the right to tighten conditions, and if data shows a further cooling, it will consider a reduction.
