The National Bank of Georgia (NBG) on March 17 increased the key refinancing rate by 50 basis points to 8.5%, citing inflation risks such as persistence of depreciated exchange rate and price increases in international commodity markets.
The Monetary Policy Committee said it also expects the inflation rate to increase following the completion of a government subsidy program on utility fees, which previously contributed to “temporary” low inflation. It forecasted inflation to remain at 4-4.5% throughout the year and then gradually approach the targetted 3%.
Among other factors pressuring the inflation upward, the policy-setting committee named uncertainties about the recovery of external demand, increased oil products and food prices, higher production costs, as well as high dollarization for the economy.
However, it highlighted that there is no apparent need to further tighten the monetary policy during the year.
The Monetary Policy Committee convenes again on April 28.
- February 3: Georgian Central Bank Keeps Key Rate at 8%
- December 9: Georgian Central Bank Keeps Key Rate at 8%
- October 28: Georgian Central Bank Keeps Key Rate at 8%
- September 16: Georgian Central Bank Keeps Key Rate at 8%
- August 5: Georgian Central Bank Reduces Key Rate to 8%