NBG Keeps Key Refinancing Rate Unchanged at 10%
On October 25, 2023, the National Bank of Georgia (NBG) announced that it will keep the key refinancing rate at 10%.
Inflation in Georgia remains still low, below the target rate of 3%. In September, headline inflation stood at 0.7%, while core inflation was 2.5%. According to the Central Bank, low inflation “is caused by the weakening of the price pressures stemming from the pandemic and the Russia-Ukraine war, as well as “tight monetary policy itself.” Both factors led to a decrease in domestic goods inflation, which equaled 5.3% in September. The NBG estimates that “inflation will remain below the 3% target throughout the rest of 2023, and in 2024 it will stabilize around it.”
Despite the positive trends, the NBG clarifies that uncertainty is still high due to the acute geopolitical situation and unstable environment that was also affected by the conflict in the Middle East. Besides that, “trends on the fuel market have also partially worsened, both in terms of price and supply volatility,” – notes the NBG. Trends in the domestic economy are also added to the existing uncertainty: “Demand is still strong and 6% economic growth is expected this year.” The NBG adds that credit growth, particularly the business loans, “somewhat accelerated” as well, mostly in foreign currency.
Given the above mentioned risks and uncertainty, the NBG decided to keep tight monetary policy and remain focused on keeping inflation low.
The next meeting of the Monetary Policy Committee will be held on December 20, 2023.
Also Read:
- 13/09/2023 – NBG Reduces Key Refinancing Rate from 10.25% to 10%
- 02/08/2023 – NBG Reduces Key Refinancing Rate from 10.5% to 10.25%
- 21/06/2023 – NBG Keeps Key Rate at 10.5%
This post is also available in: ქართული (Georgian) Русский (Russian)
