NBG Keeps Key Rate at 10.5%

On June 21, 2023, the National Bank of Georgia (NBG) announced that it will keep the refinancing rate unchanged at 10.5 %.

In May, annual headline inflation decreased to 1.5 % ( in April-2.7), while the core inflation rate retreated to 3.9 percent ( in April- 4.7). Domestic inflation remained high at 9.1 % in May.

The annual inflation rate is expected to gradually stabilize around 3 % in the medium term.

According to NBG, higher-than-expected economic activity may intensify demand-side inflationary pressures with average annual economic growth for the first four months of 2023 standing at 7.7%.

Considering the inflation dynamics and forecasts of the previous Monetary Policy Committee meeting, the NBG decided to start a gradual exit from its tight monetary policy stance, which implies policy rate reduction at a moderate pace.

The next meeting of the Monetary Policy Committee will be held on August 2, 2023.

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This post is also available in: ქართული (Georgian) Русский (Russian)


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