The key refinancing rate will remain unchanged at 6.5%, the National Bank of Georgia (NBG) said in its statement on May 1.
According to the NBG, the inflation rate remained around the target level of 3% in the first two months of 2019, but reached 3.7% in March – caused by an increase in tobacco excise tax. The NBG anticipates that the inflation rate will decrease in coming months, and will fluctuate around the target level.
The Bank also reported that although aggregate demand falls short of its potential level, the monetary rate is still expected to be further reduced over the year, considering “low inflationary pressures,” and “moderately increased external demand.”
The Bank started a gradual exit from its moderately tightened monetary policy in July 2018, reducing the key rate from 7.25% to 7%. It kept the rate unchanged for three consecutive meetings until decreasing it again to 6.75% on January 30 and to 6.5% on March 13, 2019.
The National Bank’s monetary policy committee will hold its next meeting on June 12, 2019.