The National Bank of Georgia (NBG) increased the key refinancing rate by 0.5% points to 10% today, at its 13-year highest, citing “unexpectedly high” inflation of annual inflation at 11.9% in July.
The Monetary Committee of the NBG said the driving forces of high inflation are predominately one-off and independent from monetary policy, with the major ones being the sharply increased prices of food and oil in international markets. It also highlighted significantly increased international shipping costs as well as domestic demand.
According to the National Bank, the current level of lending growth is higher than desired, adding that it expects inflation in 2021 on average to stand over 9%.
The Monetary Policy Committee of the National Bank will convene again on September 15, 2021.
- Annual Inflation in July Hits 10-year High at 11.9%
- Central Bank Keeps Key Rate at 9.5%
- Central Bank Raises Key Rate to 9.5%, Highest Since 2008