The President of the National Bank Koba Gvenetadze declares, that the National Bank enacted temporary instruments amid the pandemic. This was announced by the Chief Banker at the Finance and Budget Committee at the Parliament, where he introduced the main directions of the monetary policy of 2021-2023.
According to the NBG, the National Bank enacted temporary instruments in order to avoid future liquidity risks: currency swaps, permanent currency swaps, and liquidity support instruments for SME lending. It is important that these tools are available to microfinance organizations in addition to banks.
From the beginning of 2020, inflation began to decline, as it had been expected. However, the shock caused by the global coronavirus pandemic changed the inflation trajectory. Against this background, inflation rose to 6.9% in April. However, in the following months, a gradual decline trend was observed. In September-November, annual inflation remained at 3.8%.
“Under the current circumstances, since the beginning of the pandemic, the National Bank has reduced the monetary policy rate by a total of 1 percentage point, although the rate has remained at 8 percent since August. At this point, high dollarization does not allow us to soften monetary policy”, said Koba Gvenetadze.
