The Central Bank of Armenia left its benchmark interest rate unchanged at 6.5% at its August 2026 policy meeting, maintaining a cautious stance as inflation remained above target. The deposit rate was kept at 5%, and the lending rate at 8%, thereby preserving the existing monetary policy corridor.
The decision came after June inflation registered at 5.1%, with core inflation at 4.9%. These readings reflect robust domestic activity, particularly in construction and services, as well as an improvement in external demand. At the same time, the Bank underscored ongoing risks stemming from subdued global growth, elevated energy prices, and persistent uncertainty in the external environment.
While demand pressures and supply-side factors continue to support inflation, moderating wage growth, more stable inflation expectations, weaker export performance, and potential disinflationary forces remain key policy considerations. Market participants generally anticipate that the policy rate will stay at 6.5% over the medium term as the Central Bank seeks to balance upside inflation risks against downside growth risks and steer inflation back toward its 3% target.
