{"id":282543,"date":"2026-11-03T17:42:07","date_gmt":"2026-11-03T13:42:07","guid":{"rendered":"https:\/\/armbanks.am\/?p=282543"},"modified":"2026-11-03T17:42:09","modified_gmt":"2026-11-03T13:42:09","slug":"central-bank-of-armenia-continued-its-rate-hike-amid-prevailing-inflation-risks-galstyan","status":"publish","type":"post","link":"https:\/\/armbanks.am\/en\/2026\/11\/03\/282543\/","title":{"rendered":"Central Bank of Armenia continued its rate hike amid prevailing inflation risks \u2013 Galstyan"},"content":{"rendered":"\n

YEREVAN, November 3. \/ARKA\/.<\/strong> The Board of the Central Bank of Armenia has decided to continue its policy of raising interest rates, taking into account the likelihood of scenarios involving increased inflation risks, stated Central Bank Chairman Martin Galstyan.<\/p>\n\n\n\n

On November 3, the Central Bank of Armenia decided to increase the refinancing rate by 0.25 percentage points to 7%. This is the second consecutive rate hike, following the Board’s first increase since December 2022, on September 15, 2026, by 0.25 percentage points, to 6.75%. “I think that the majority of the Central Bank’s Board members made their decision, attaching significant importance to the existence of a Type A scenario,” Galstyan said at a press conference on Tuesday, responding to a question from the ARKA news agency about the future trajectory of monetary policy, prevailing risks, and possible conditions for raising or lowering the rate.<\/p>\n\n\n\n

According to him, in the current situation, there is a possibility of raising the global neutral interest rate. Among the factors considered by the regulator, Galstyan cited excess domestic demand in Armenia, the increase in external demand in recent months, and possible supply-side inflation, particularly rising energy prices and global food prices.<\/p>\n\n\n\n

“Taken together, all these scenarios, all these events, Type A scenarios, in our assessment, are more likely,” he noted.<\/p>\n\n\n\n

The head of the Central Bank explained that, taking these factors into account, the Board of the regulator decided to continue the policy of raising the rate, initiated at the previous meeting. “The Central Bank Board’s decision was to continue the policy of raising the rate we adopted at the previous meeting to ensure that our actions will definitely bring inflation to the 3% target,” Galstyan said.
He emphasized that the Central Bank’s consistent actions are aimed at neutralizing these factors.<\/p>\n\n\n\n

Global Economic Risks and Rising Inflationary Pressure<\/p>\n\n\n\n

Presenting the Board’s decision on the refinancing rate, the head of the Central Bank of Armenia noted that, amid high uncertainty regarding the duration of regional conflicts and the prospects for their resolution, the risks of further weakening demand in the global economy and, simultaneously, increasing inflationary pressure are gradually becoming more noticeable.<\/p>\n\n\n\n

In the United States, high and expanding investment activity in artificial intelligence, on the one hand, and concerns about fiscal sustainability, on the other, contain risks of a possible increase in long-term neutral interest rates, with a corresponding impact on neutral interest rates and capital flows in developing countries.<\/p>\n\n\n\n

In the eurozone and Russia, despite a weak recovery in economic growth in recent quarters, structural problems persist, limiting medium-term economic growth prospects.<\/p>\n\n\n\n

Amid ongoing tensions in the Middle East and concerns about the resilience of supply chains, energy prices continued to remain high, and the gradual drawdown of accumulated inventories increased market vulnerability to potential further supply shocks.
At the same time, due to both current geopolitical events and unfavorable weather conditions, global food prices are also accelerating. In this context, the risks of further monetary policy rate hikes by central banks in leading countries and their prolonged persistence at elevated levels are becoming palpable. <\/p>\n\n\n\n

Scenarios Considered<\/p>\n\n\n\n

Galstyan noted that, given the discussed risks and existing uncertainties, the Council considered Type A scenarios, which involve the risks of rising neutral interest rates in the global economy, the emergence of conditions of higher demand in the domestic economy, and the continued strengthening of inflationary pressures amid protracted regional conflicts, requiring a higher monetary policy rate trajectory compared to market expectations.<\/p>\n\n\n\n

On the other hand, the Council discussed Type B scenarios, which involve a slowdown in global economic growth, weakening investor and consumer confidence amid uncertainty regarding the outlook for economic relations with Russia, and a fundamental decline in Armenia’s country risk premium. These scenarios imply a lower monetary policy rate trajectory compared to market expectations.<\/p>\n\n\n\n

The Central Bank of Armenia’s rate cut cycle began in June 2023, when the regulator lowered it from 10.75% to 10.5%. The rate was subsequently gradually reduced and reached 6.5% in December 2025, after which it remained at this level until September 2026.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Board of the Central Bank of Armenia has decided to continue its policy of raising interest rates, taking into account the likelihood of scenarios involving increased inflation risks, stated Central Bank Chairman Martin Galstyan.<\/p>\n","protected":false},"author":5,"featured_media":268032,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":"","tstyn_error":""},"categories":[12139,9216],"tags":[16278,12225],"class_list":["post-282543","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy-en","category-news","tag-bank","tag-inflation"],"acf":[],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t