“TBC Capital” expects the refinancing rate to decrease from 8% to 7.5% next year, citing lower inflation and favorable conditions in the foreign exchange market, according to Otar Nadaraia, Chief Economist at TBC Group.
Nadaraia noted that monthly inflation is already approaching the target rate, despite recent annual increases. “Inflation will return to its target rate over time, and this is our forecast,” he said, highlighting that the trend in U.S. monetary policy and excess supply in the foreign exchange market further support a potential rate cut.
The economist emphasized that while risks and uncertainties remain, including global financial factors, current indicators suggest a reduction in the refinancing rate is feasible. “Overall, our scenario is that the refinancing rate will be approximately 7.5% next year,” Nadaraia stated.
For context, the National Bank of Georgia’s Monetary Policy Committee decided on December 17 to keep the refinancing rate at 8%, noting that despite a drop in November inflation to 4.8%, maintaining the rate is still necessary.
