The Monetary Policy Committee (MPC) of the National Bank of Georgia (NBG) met on October 23, 2019, and decided to raise the refinancing rate by 1 percentage point to 8.5 percent.
In September, the annual inflation rate stood at 6.4 percent. Along with one-off factors, the overshooting was caused by the increased pass-through from the nominal exchange rate depreciation to inflation in recent periods. According to the forecast, other things equal, the inflation will remain above the target during this year, will start to decline from March 2020 and stay close to the target in the medium term.
From September, The NBG started to tighten monetary policy aiming at neutralizing inflationary pressures stemming from the exchange rate depreciation. Over the last two meetings, the Monetary Policy Committee made the decision to increase the policy rate by one percentage point. As it was noted in the statements, the policy tightening would continue until the pressure from exchange rate receded.
The GEL nominal effective exchange rate remains undervalued, exerting upward pressure on inflation. This inflationary pressure is only partially offset by the aggregate demand-side factors as the economic activity is enhanced compared to previous periods, based on preliminary estimates. Hence, on today's meeting, the Monetary Policy Committee decided to increase the refinancing rate by one percentage point. The future decisions of the committee will depend upon the speed of neutralization of exchange rate pressure stemming from the exchange rate depreciation.
According to the preliminary estimates, in the third quarter, the current account balance continued to improve. The persistence of positive dynamics in the external sector, together with the monetary policy tightening, should support the strengthening of the exchange rate though expectations channel, and, hence, provide favorable inflation dynamics in the medium term.
The NBG will continue to monitor the developments in the economy and financial markets and will use all means and instruments at its disposal to ensure price stability.
The next meeting of the Monetary Policy Committee is scheduled on December 11, 2019.
Source - NBG
See all the news
როგორ მოხვდა 17 წლის ანასტასია ლელაძე ჰარვარდში? - ანასტასია ლელაძე ქალების ნარატივში
"Literally the whole village was waiting for the first harvest of strawberry" - Kvitsiani family from Svaneti
Putin imposes visa restrictions on citizens from 'unfriendly' countries
BMG-ს მედია რუბრიკა: #პროფესიონალი - გიორგი მიქაია
Business Leaders Council by USAID and Georgian Business
ბინების ქირის ფასი 50%-მდე გაიზარდა
"Today we are all Ukrainians"- Zurab Pololikashvili
Tourism is the main bridge for building understanding - ZURAB POLOLIKASHVILI
FAQ’s and Analysis on Lari & FDI - Interview with Fady Asly
მინერალური და მტკნარი წყლის ფასები ქართულ ბაზარზე
China continues to push competitors out of the global walnut market
Moscow to Host First Meeting of Turkish & Armenian Special Envoys on Jan 14
Scientists Discover New Part of the Human Body
Turkey's Exports Soar by 33.7% to $21.5B in November
რა ხდება საკაბელო პროდუქციის ბაზარზე?
საქმის კურსი - 16.12.2021 - ღამის კოლაჟი
საქმის კურსი - 16.12.2021_17:40 / გადაცემა სრულად
#COVID19-ის ახალი შტამი: #ომიკრონი - რა სიმპტომები აქვს “ომიკრონს”?
#ForbesTalks: Interview with Oleg Ossinovski / ინტერვიუ ოლეგ ოსინოვსკისთან