Central Bank Cuts Key Rate by 0.25 Basis Points to 8.25%
On June 24, the National Bank of Georgia reduced its benchmark interest rate by 0.25 basis points to 8.25% to help the economy in recession due to the COVID-19 outbreak.
The Monetary Policy Committee of NBG lowered the lending rate while the Bank saw the annual inflation reach 6.5% in May.
The NBG forecasts that inflation will continue to gradually decline over the rest of the year and it is expected to hit the target level of 3% in the first half of 2021.
Increase in costs of supply of some goods and services due to COVID-19 containment measures was a one-off, the Central Bank said.
The Bank decided to slightly relax monetary policy to foster swift economic recovery after most sectors were hit hard by the pandemic.
The NBG pledged to “use all instruments” at its disposal in order to attain its primary objective – maintaining price stability.
The Monetary Policy Committee of NBG is expected to convene again on August 5.
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