Armenia Central Bank Hikes Policy Rate to 6.75% Amid Excess Demand and Inflation Risks
The Central Bank of Armenia has raised its policy rate by 25 basis points to 6.75% as of September 15, citing excess demand and inflation above its target of 3%. This is the first increase since December 2025.
According to Governor Martin Galstyan, construction and services growth point to excess demand, while high growth in final consumption goods imports and retail trade also indicate this trend. Additionally, a significant increase in visits to Armenia creates risks of faster wage growth and acceleration in services prices.
The bank's decision was made against an unsettled external backdrop, including prolonged regional conflicts, elevated energy prices, and upside risks to long-term neutral rates in the United States. Galstyan noted that structural problems in the eurozone and Russia are deepening despite a modest second-quarter recovery.