Armenia’s central bank raises policy rate to 7%
The board raised its benchmark by 25 basis points on 3 November, its second consecutive increase after a quarter-point rise in September.
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The board raised its benchmark by 25 basis points on 3 November, its second consecutive increase after a quarter-point rise in September.
The Central Bank of Armenia’s board raised its policy rate by 25 basis points, or 0.25 percentage point, to 7% at its 3 November 2026 meeting. The benchmark influences the cost of money for commercial banks.
It was the second consecutive increase: on 15 September, the bank raised the rate by 0.25 percentage point to 6.75%.
How2B said the central bank cited above-target inflation and excess demand in the economy. Annual inflation in September was 4.3%, above the bank’s medium-term target of 3.00%.
The bank’s announcement directs readers to its Executive Monetary Policy Statement for more information. Estimates of the preceding month’s inflation differ: Hetq put annual inflation in August at 4.50%, while Azatutyun gave 4.4%.
The board also set rates for two facilities used by commercial banks:
| Facility | Rate |
|---|---|
| Lombard repo | 8.5% |
| Deposit | 5.5% |
The central bank’s main refinancing instrument uses repo transactions it initiates to inject short-term liquidity. The standing facilities let commercial banks initiate transactions to obtain or place funds and correct overnight liquidity imbalances; their rates set upper and lower bounds for short-term market rates.
Officials and company representatives said on 3 November that 4 supermarkets in Germany and 6 in Romania were affected; the UK was also hit. Retailers discarded food as refrigeration temperatures rose.
After the earlier increase, Governor Martin Galstyan said that making money more expensive encourages people to save rather than spend, reducing pressure on prices. He also said commercial banks do not respond immediately to a change in the refinancing rate.
The bank scheduled a press conference led by Galstyan for 14:00 Yerevan time on 3 November, with a live stream on its YouTube channel and Facebook page. It plans to publish its Transparency Report on its website at 18:00 Yerevan time.
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The company has begun dissolution procedures and says contracts for employees not offered continued employment will end on 30 November, or earlier if they expire before then.
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The bank’s fifth increase of 2026 passed by a 6–3 vote and takes the rate to its highest since 2008. Canstar estimates it will add $107 a month to payments on a $700,000 home loan.
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