YEREVAN, November 4. /ARKA/. The market expects a decline in the refinancing rate to between 6.25% and 6.5% in the medium term, nevertheless, Martin Galstyan, the Governor of the Central Bank of Armenia, indicated that the regulator does not concur with these predictions.
On November 4, the Central Bank Board maintained the refinancing rate at 6.75% for the sixth consecutive meeting.
“We believe that Scenario A risks persist, which are associated with a potential rise in global neutral interest rates due to fiscal policy influences, as well as the emergence of excess demand within the domestic economy. This situation necessitates a higher interest rate trajectory than what the market anticipates. We are adopting a more cautious approach and implementing a more suitable policy,” Galstyan remarked during a press conference on Tuesday.
In response to an inquiry from ARKA, he pointed out that the Central Bank perceives greater risks than those acknowledged by financial market participants, which accounts for the divergence from expectations. Furthermore, Galstyan mentioned that the regulator will investigate reports regarding the reduction of deposit rates in certain banks, as this could have implications for loan rates.-0-
