The Monetary Policy Committee of the National Bank of Georgia (NBG) decided to keep the monetary policy rate unchanged at 11%, - according to the NBG Governor Koba Gvenetadze.
"Given the current high uncertainty and inflationary risks, the National Bank of Georgia is still concentrated on reducing inflation. In order to eliminate additional inflationary pressure and reduce the risk of rising inflationary expectations in the medium term, according to the current forecast, the National Bank of Georgia will pursue a tight monetary policy throughout the year. Given a tight policy stance, including the impact of macroprudential instruments implemented recently, credit growth continued to slow down, and this trend is expected to be maintained in the future.
In addition, with zero interest paid on required reserves for funds attracted in the USD and Euro, tightening of global financial conditions further amplifies the effect of tight policy stance on foreign currency loans in Georgia. Monetary policy easing is expected only once actual inflation approaches the target, which should prevent a deterioration of long-term expectations. If an upside pressure on inflation expectations becomes considerable again, it may be necessary to further tighten monetary policy or maintain the current tight stance for a longer period.
The NBG continuously monitors the developments in the economy and financial markets and will use all available tools to ensure price stability", - Koba Gvenetadze said.
