YEREVAN, November 13. /ARKA/. The Central Bank of Armenia (CBA) should continue to monitor economic developments and inflation expectations, and remain prepared to adjust its key policy rate as necessary. This is stated in a release from the International Monetary Fund (IMF) following a mission visit to Armenia.
The IMF welcomed the CBA’s decisions to raise the key policy rate by a cumulative 50 basis points in September and November, amid persistent inflationary pressures.
On November 3, the Central Bank of Armenia decided to increase its refinancing rate by 0.25 percentage points, bringing it to 7%. This marks the second consecutive rate hike; on September 15, the CBA Board had raised the monetary policy rate by 0.25 percentage points—to 6.75%—the first such increase since December 2022.
“The CBA’s efforts to build up international reserves, amid continued capital inflows, should further strengthen resilience against potential shocks,” the statement notes.
According to the IMF, significant capital inflows have enabled the Central Bank of Armenia to bolster its international reserve position through foreign currency purchases during periods of favorable market conditions. As Minister of Finance Vahe Hovhannisyan previously noted, the Central Bank of Armenia has intervened in the market, purchasing approximately $1.9 billion between the beginning of this year and September. As a result, Armenia’s gross international reserves have reached an all-time high of $6.7 billion.
The Fund also considers it appropriate to increase the countercyclical capital buffer for banks in two stages—from 1.75% to 2.25%—to further bolster the financial sector’s buffers, as well as its supervisory toolkit and capacity.
According to the IMF, Armenia’s banking system remains profitable and maintains substantial capital and liquidity buffers.
