The National Bank of Georgia (NBG) kept on February 15 its main policy rate unchanged at 6.5%.
Annual inflation was 0.5% in January, the lowest in more than two years. The central bank said on February 15, that inflation was expected to go up from the second half of this year reaching a target level of 6% by the end of 2012.
Despite low inflation the real exchange rate had been appreciating in the end of last year, causing “further widening of the trade deficit” as well as weakening of the demand, NBG said.
Economy grew more-than-expected in the fourth quarter of the last year making real GDP growth for 2011 6.8% and remittances sent to Georgia in January also went up 13.4% y/y.
The central bank cited these factors behind its decision to keep its main policy rate unchanged.
NBG was gradually reducing key rate from 7.5% for previous four consecutive months.