Central Bank Keeps Key Rate at 10%

The Monetary Policy Committee of the National Bank of Georgia (NBG) today decided to keep the key refinancing rate unchanged at 10%, after raising it by 0.5% points at its 13-year highest in August.

The central bank said the 12.8% annual inflation rate of August had exceeded the forecasts, and expects the inflation to remain high for the rest of the year.

It cited “one-off” exogenous factors as the key driver of the high inflation rate, including the “sharply increased prices” of food and oil in the international markets, as well as increased international shipping costs.

Georgia’s central bank estimated that growth in prices of the imported products accelerated to 18.7% year-over-year in August.

The NBG said that while the monetary policy remains tight, it expects inflation to decline “significantly’ from spring 2022.

The Monetary Policy Committee will convene again on October 27.

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