YEREVAN, October 31. /ARKA/. At the next meeting of the Central Bank of Armenia, the refinancing rate will be maintained at 6.75%, according to Georgi Melkonyan, head of Freedom Academy.
“This is a rational choice: the ‘wait and see’ policy gives the Central Bank room to maneuver. If inflation accelerates or volatility in the foreign exchange market increases, the regulator reserves the right to tighten conditions. If the data shows a further cooling, it will consider a reduction,” he said in an exclusive comment to ARKA news agency.
According to Melkonyan, the Central Bank of Armenia’s recent decisions show that the regulator is consciously pursuing a strategy of monetary caution.
“The rate was already consistently reduced to 6.75% in February, and further steps are not a matter of haste, but rather of balancing risks,” he explained.
The expert notes that the current rate is at a level that can be called neutral: it doesn’t stifle economic activity, but also doesn’t create excessive stimulus.
“Inflation has stabilized around 3-4%, that is, close to the medium-term target, and this creates a comfortable backdrop for a pause,” he said.
Furthermore, as Melkonyan notes, the dram exchange rate remains stable—there are no sharp devaluation movements, meaning imported inflation is under control.
In his opinion, amid external turbulence, uncertainty in global markets, and a slowing global economy, the Central Bank prefers to maintain predictability rather than introduce additional stimulus.
“We are seeing a moderate cooling of lending activity, and global liquidity is, to put it mildly, unstable. In such an environment, cutting the rate means taking on the risk of overheating demand and creating inflationary pressure in a few quarters.” “Raising the rate is too aggressive a reaction given stable price expectations and the absence of force majeure inflation shocks,” the head of Freedom Academy concluded.
The Board of the Central Bank of Armenia has been continuously lowering the key interest rate since June 2023, gradually bringing it from 10.75% to 6.75% in February 2025. Since then, the rate has remained unchanged, including the regulator’s latest decision on September 16. The next meeting of the Board of the Central Bank of Armenia will be held on November 3.
The World Bank, in its “Armenia Monthly Economic Update – October 2025,” noted that the Central Bank of Armenia has outlined a gradual easing cycle with plans to reduce the key interest rate to approximately 6.25% over the next 12 months.
