The CBA’s governing board set the refinancing rate at 9.25 percent – up by 1.25 percentage points.
The CBA expects that Armenia may experience a significant slowdown in its economic growth as one of the impacts of the sanctions imposed against Russia.
“This will happen mostly at the expense of a decline in the industry. Total demand will be affected by declining remittances and a weakening external demand. Positive contribution is expected from the tourism sector. Increased geopolitical risks in the region and a high degree of uncertainty have led to increased volatility in Armenia’s financial markets. Existing uncertainties are also reflected in inflation and inflation expectations,” the CBA said.
“In the current situation, the Board considers it expedient to increase the refinancing rate by a relatively large step,” it added.
The CBA expects that as a result of such policy measures, 12-month inflation will gradually decrease, reaching the target of 4 percent.
This is the second time the CBA raises its key interest rate. On February 1, it raised it by 0.25 percentage points to 8 percent.
Speaking at a press conference in Yerevan today, CBA governor Martin Galstian said that the CBA has revised its economic growth forecast for Armenia for 2022 from 5.3 percent down to 1.6 percent.