TBC Capital expects the National Bank of Georgia (NBG) to keep its refinancing rate unchanged at its monetary policy meeting scheduled for October 21 at 12:00 p.m., according to the company’s latest macroeconomic update.
The investment bank notes that arguments for monetary policy tightening have strengthened compared with previous meetings, citing rising services inflation and tighter global financial conditions.
However, mixed recent economic trends and expectations of lower inflation next year, largely dependent on external conditions, support maintaining the rate unchanged for now.
TBC Capital warns that if persistent inflationary pressures strengthen further, expectations of interest rate hikes in the United States and the eurozone in December could increase the likelihood of the NBG raising its refinancing rate to 8.5% by the end of the year.
