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2025-12-16 17:49:59
[Armenia Cuts Key Interest Rate to 6.5%] ⑴ The Central Bank of Armenia cut its benchmark interest rate by 25 basis points to 6.5% at its December meeting, marking the second and final rate cut this year and bringing borrowing costs to their lowest level since July 2021. ⑵ Policymakers also lowered deposit and lending rates to 5% and 8%, respectively. This decision was based on overall inflation slowing to 3.1% in November, close to the 3% target, while core inflation rose to 3.8%, with recent pressures seen as supply-driven and demand-neutral. ⑶ Economic activity remained strong, despite continued uncertainty stemming from slowing domestic demand and growth among major trading partners. ⑷ The committee noted two-way risks, encompassing global inflation and fiscal pressures, as well as weak external and domestic demand, including a housing market adjustment. ⑸ Overall, policymakers hinted at a gradual easing path ahead, with markets expecting the policy rate to be close to 6.25% over the next 12 months, while the central bank reiterated its commitment to maintaining price stability at the 3% target.
