Central Bank Holds Key Rate at 11%
The Monetary Policy Committee of the National Bank of Georgia (NBG) today kept the refinancing rate unchanged at 11%.
In its decision, the central bank noted that “inflationary pressure is still quite high both in Georgia and in the rest of the world,” adding that sanctions imposed on Russia over its invasion of Ukraine have delayed supplies which have significantly raised international prices on food, energy, and other commodities.
It also emphasized that against the backdrop of “consecutive shocks, inflation has long deviated from the target level, which further amplifies inflationary risks.”
On a positive note, the Central Bank highlighted that brent oil prices and shipping costs continue to decline, while the international food price index decreased on a monthly basis by 9% in July and by 1.9% in August. The Central Bank denoted that these trends will “gradually be transmitted to the local market.”
Pointing out that headline inflation maintained its downward trajectory and reached 10.9% in August, the Central Bank underscored that these “signs of inflation deceleration give reasons for cautious optimism.”
On that note, the Central Bank predicted that inflation will gradually decline both this and next year and approach the target level from the middle of 2023.
The next meeting of the Monetary Policy Committee is expected to take place on 26 October 2022.
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