YEREVAN, May 11. /ARKA/. The week in the Armenian financial market was influenced by decisions and statements by the Central Bank, updated macroeconomic data, and capital market activity. Monetary policy, the institutional stability of the financial system, inflation, and capital flows were the focus.
- Monetary Policy: The Central Bank of Armenia Maintains the Key Rate at 6.5%
On May 5, the Board of the Central Bank of Armenia left the refinancing rate unchanged for the fourth consecutive time, at 6.5%. The Lombard repo rate also remained at 8%, and the fundraising rate at 5%.
This decision may confirm the regime for adjusting monetary conditions, in which banks and borrowers continue to operate within the established rate corridor.
- Regulatory Policy: Martin Galstyan Re-Elected as Chairman of the Central Bank of Armenia
On May 5, the National Assembly of Armenia re-elected Martin Galstyan as Chairman of the Central Bank for a six-year term. His candidacy was submitted to the parliamentary majority by the ruling faction.
This may mean not only maintaining institutional continuity in monetary and macroprudential policy, but also maintaining the current regulatory approaches and supervisory parameters.
- Foreign Exchange Market: Dram Maintains Limited Fluctuations
From May 5-8, the exchange rates of major currencies in Armenia’s foreign exchange market remained moderate. According to the Central Bank, the US dollar fell from 370.44 drams to 369.01 drams, the euro fluctuated between 432.9 and 434.14 drams, and the Russian ruble rose from 4.9006 drams to 4.9472 drams. Limited volatility can support settlement stability, preserve the predictability of short-term transactions in the foreign exchange market, and reduce pressure on the banking system’s foreign exchange liquidity.
- Capital Market: Equity Market Capitalization Exceeds AMD 470 Billion
Equity market capitalization on the Armenia Stock Exchange exceeded AMD 470 billion in April. As of May 7, the volume of stock trading increased by 287% to approximately AMD 591.5 billion, the volume of government bond placements on the AMX primary market exceeded AMD 120.6 billion, and the volume of corporate bond trading increased by 195% year-on-year to approximately AMD 23.5 billion.
The growth of AMX trading could increase the importance of the exchange infrastructure for issuers, investors, and financial intermediaries, as well as expand the range of market benchmarks for assessing the cost of capital.
- Eurobonds and government debt: risk premium declined to 190 bps.
Central Bank Governor Martin Galstyan announced on May 5 that the risk premium on Armenian Eurobonds had declined from 400 to 190 basis points. According to him, the yield on ten-year dram government bonds now exceeds 8%, and the share of government debt held by international institutional investors has approached 10%.
In practice, the decline in the risk premium could impact debt market benchmarks and strengthen the role of government securities as a basic pricing instrument.
- Financial stability: Central Bank does not detect capital outflow from Armenia
Deputy Chairman of the Central Bank of Armenia Hovhannes Khachatryan announced on May 5 that the regulator is not observing capital outflow from Armenia amid ongoing regional uncertainty. However, he does not see any possibility of a quick resolution to the situation around the Strait of Hormuz, particularly with regard to energy prices. Maintaining a stable capital situation could support the current operating mode of the banking system and reduce pressure on the foreign exchange market.
- Remittances: Net Inflow in Q1 Increased 3.19-Fold
According to the Central Bank, the net inflow of cross-border transfers from individuals through the banking system in the first quarter of 2026 amounted to $458.2 million, compared to $143.7 million a year earlier. The total inflow of transfers reached $1.47 billion, with Russia and the United States among the main destinations.
The increase in net inflow could increase the importance of cross-border transactions in the banking system and influence the structure of currency flows within the financial market.
- Investment Agenda: Central Bank Governor Announces Need for New Projects for Banks and Pension Funds
Central Bank Governor Martin Galstyan stated on May 5 that Armenia needs new investment projects that could be financed by the banking sector and pension funds. He noted that the country has significant financial resources in both banks and pension funds.
The discussion of new projects may reflect the regulator’s focus on developing domestic investment mechanisms and expanding economic financing instruments.
Weekly Summary
The week’s key events indicate the continuation of current monetary policy parameters and regulatory continuity.
