Central Bank Cuts Key Rate to 6.5%

Georgia’s central bank cut its key refinancing rate by 25 basis points to 6.5% on Wednesday.

“The monetary policy decision is based on the macroeconomic forecast, according to which the phasing out of tight monetary policy must continue in order for inflation to reach its target level,” monetary policy committee of the National Bank of Georgia said after a meeting on September 7.

Georgia’s annual inflation slowed to 0.9% in August from 1.5% in July – far below of 2016’s target level of 5%.

NBG started tightening of monetary policy from February 2015 with the key rate gradually increasing in a course of last year from 4% in the beginning of 2015 to 8% by the end of last year. The key rate was remaining unchanged at 8% in the first three months of this year before starting gradual easing of the monetary policy in April.

The next meeting of central bank’s monetary policy committee has been scheduled for October 26.