YEREVAN, January 30. /ARKA/. The Chairman of the Central Bank of Armenia Martin Galstyan said today that two factors influenced the regulator’s decision to lower the refinancing rate by 0.5 percentage points today, setting it at 8.75%. This is the 6th downgrade since June last year.
Glastian pointed to the downward dynamics of hard commodity prices, noting that stabilization trends are being observed.
“In addition, due to the increased supply in the labor market, we see that the wage boom seen in recent years has some tendencies to soften. These two factors had a significant impact on our decision,” he said.
In this regard, the head of the regulator noted that the growth of nominal wages in the private sector after 2021 reached about 30% at the peak, after which there was a significant decline, and according to the situation as of November 2023, the annual growth amounted to 10%.
According to Galstyan, in some sectors, particularly services, wage growth remains high, but other segments are recording significant declines.
“Thus, we have no serious concerns about the impact of this phenomenon on the further development of inflation,” he explained.
In this context, the Central Bank Chairman noted that a certain part of refugees from Nagorno-Karabakh has already integrated into Armenia’s labor market along with workers from other countries.
“We believe that these two factors have conditioned the easing of overheating in the labor market. It also allowed us to be more bold in making today’s decision on the refinancing rate,” he explained. -0-
