The National Bank of Georgia (NBG) reduced its key refinancing rate by 25 basis points to 6.75% on January 30, quoting “a weak inflationary pressure.”
NBG says it has started a gradual exit from “the moderately tightened monetary policy” in July 2018. It also said that according to the forecast, the monetary rate is expected to be reduced further over the year.
“The speed of normalization will depend on how fast the output gap will close, on one hand, and how strongly the increased regional macroeconomic risks will be transmitted to Georgian economy, on the other,” the National Bank in its statement released on Wednesday.
The Central Bank noted that throughout 2018, in line with the forecasts, inflation rate remained around the target level of 3%. In December, the annual inflation equaled 1.5%. According to the NBG forecasts, inflation is expected to fluctuate near the target level.
“The NBG will continue to monitor the developments in the economy and financial markets and will use all means and instruments at its disposal to ensure the price stability,” the NBG said.
The next meeting of the monetary policy committee will be held on March 13, 2019.