National Bank of Georgia increases refinancing rate to 7%
In August 2019, annual inflation amounted to 4.9 per cent in Georgia, which is more than the inflation target of three per cent set by the National Bank of Georgia for 2019-2021. Photo: bm.ge.
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The National Bank of Georgia (NBG) has increased the refinancing rate by 0.5 percentage points to 7 per cent.
The depreciation of the exchange rate has boosted inflationary expectations, the NBG says, therefore the refinancing rate has been increased, which will continue until the pressure of the exchange rate on inflation decreases.
In August 2019, annual inflation amounted to 4.9 per cent in Georgia, which is more than the inflation target of three per cent set by the National Bank of Georgia for 2019-2021.
By steering interest rates, the NBG influences the level of inflation. Specifically, the change in short-term rates is transmitted to long-term rates, which, ultimately, affects the interest rates on loans.
When projected inflation is above the target inflation rate, the NBG raises refinancing rate to combat a future surge in the general price level.
According to the forecast of the NBG, inflation will remain above the target level this year but will start to decline from March next year, and stay close to the target in the medium-term, the NBG said.
The next meeting of the Monetary Policy Committee is scheduled for October 23, 2019.
The Georgian lari has sunk below 3 GEL to the US dollar in commercial banks.
The National Bank of Georgia (NBG) promises to ensure the long-term stability of the exchange rate of the Georgian national currency, the lari, and to prevent high inflation.
The National Bank of Georgia (NBG) sold $32.8 million on exchange auction earlier today as the Georgian lari continued to devalue. One US dollar cost 2.97 GEL as of today, while based on NBG forecast, it will cost about 2.93 tomorrow.
The National Bank of Georgia (NBG) plans to sell $40 million on exchange auction tomorrow as the Georgian lari continues to devalue. In a statement released on July 31, the NBG said “despite the positive internal and external macroeconomic dynamics” today’s exchange rate has reached a level “that might pose a risk to price stability” amid “the tourism-related shocks and negative expectations”.
The National Bank of Georgia (NBG) has increased the refinancing rate by 0.5 percentage points to 7.5 per cent.
The National Bank of Georgia (NBG) has sold $40 million at an exchange auction on September 27, as the Georgian lari continues to depreciate. The National Bank of Georgia (NBG) increased the refinancing rate by 0.5 percentage points to 7.5 per cent on September 25.
The National Bank of Georgia (NBG) has decreased the minimum foreign currency reserve requirements for commercial banks in Georgia from a mandatory 30 per cent to 25 per cent, which will allow commercial banks to lend the freed up five per cent – about $700 million.
The National Bank of Georgia (NBG) has increased the refinancing rate by one percentage point to 8.5 per cent.
A further increase in the refinancing rate is expected, announced the President of the National Bank of Georgia Koba Gvenetadze today at a session of the Budget and Finance Committee of Parliament.
The National Bank of Georgia (NBG) has increased the refinancing rate by 0.5 percentage points to 9 per cent, announces the National Bank of Georgia.