National Bank Increases Refinancing Rate to 8,5%

The Monetary Policy Committee of the National Bank of Georgia has decided to increase the refinancing rate to 8.5 %.

The NBG explains that the reasons behind such decision are inflation expectations as a result of the depreciation of the national currency – Lari (GEL).

The main financial institution of the country reports that the annual inflation was 6.4% in September and the influence increased the depreciation of the effective nominal exchange rate.

“Since September this year, the National Bank has begun tightening policies aimed at neutralizing inflationary pressures following the exchange rate depreciation. In the last two sessions, the percentage rate has increased by 1 percentage point and, as stated in the decisions, the tightening of the policy will continue until the pressure on the exchange rate is eliminated.

The National Bank of Georgia will continue to monitor current economic processes and financial markets and will use all available means to ensure price stability,” reads the statement. 

The next sitting of the Monetary Policy Committee will be held on December 11, 2019.

By Ana Dumbadze