YEREVAN, September 16. /ARКА/. During government hour in parliament on Wednesday, Armenian Prime Minister Nikol Pashinyan raised the possibility of raising interest rates on loans.
On September 15, Central Bank of Armenia Chairman Martin Galstyan did not rule out the possibility of raising interest rates on loans, given the Central Bank Board’s decision to raise the refinancing rate by 0.25 percentage points to 6.75%. He emphasized that raising the Central Bank’s monetary policy rate does not mean an immediate increase in bank rates.
“We think that a consistent increase in Armenia’s sovereign rating should also lead to a certain reduction in interest rates. However, we also cannot help but acknowledge that parallel global processes are underway that are driving inflationary trends, in particular, the conflict between Russia and Ukraine and the situation in the Strait of Hormuz. “I mean that interest rates are not solely determined by our factors,” Pashinyan said, responding to MP Hayk Farmanyan’s question about steps to curb the debt burden.
The prime minister also added that the government periodically discusses various issues in a working format.
“We are working in this direction,” he said.
According to official statistics, the interest rate on commercial bank loans was 12.51% in July, compared to 13.18% in June.
About Ratings
In July 2026, the international rating agency Fitch Ratings affirmed Armenia’s long-term foreign currency issuer default ratings (IDRs) at ‘BB-‘ with a positive outlook.
In July of this year, the international rating agency Moody’s Ratings changed the outlook on Armenia’s sovereign rating from ‘stable’ to ‘positive’, affirming the long-term issuer ratings in both national and foreign currencies at Ba3. In August 2026, the international rating agency S&P Global Ratings affirmed the long-term and short-term sovereign ratings of the Republic of Armenia at ‘BB-/B’, maintaining a positive outlook.
Regarding Inflation
According to Armstat, inflation in Armenia in August 2026 compared to August 2025 was 4.4%. During the reporting period, prices for food products and non-alcoholic beverages increased by 6.4% (y-o-y), prices for non-food products increased by 2.4% (y-o-y), and tariffs for services increased by 2.8% (y-o-y).
The 2026 state budget of Armenia projects inflation at 3% (±1%). According to the Central Bank’s monetary policy report for the second quarter of this year, inflation in Armenia is expected to reach 4.5-4.2% by the end of 2026, depending on scenario (A-B).
As for interest rates, we have a working format in the government where we periodically discuss these issues. We also think that the consistent improvement of Armenia’s sovereign rating should also lead to a certain reduction in interest rates. However, we also cannot deny that global processes are simultaneously underway that are driving inflation. In particular, the conflict between Russia and Ukraine and the situation in the Strait of Hormuz. I mean, interest rates are not solely determined by our factors. But we are working in this direction.
