The Central Bank of Armenia raised its policy rate by 25 basis points to 6.75% at its September 2026 meeting, citing persistent inflationary pressures and strong domestic demand. The deposit rate was increased to 5.25%, while the lending rate rose to 8.25%. Annual inflation eased to 4.4% in August from 4.5% in July, marking the lowest level since May, while core inflation edged up to 4.8% from a year earlier. Economic growth accelerated 6.7% year-on-year in the second quarter of 2026, from a 5.2% growth in the previous quarter. Against this backdrop, the Board placed greater emphasis on risks from stronger domestic and external demand and rising inflation expectations, which warranted a higher policy rate path. The rate increase came as the Bank continued to balance persistent inflationary pressures against strong domestic economic activity.