Georgia’s central bank: refinancing rate drops 25 basis points to 6.5%

The National Bank of Georgia (NBG) decreased its refinancing rate by 25 basis points following today’s advice from the Monetary Policy Committee (MPC).

With this change the bank’s refinancing rate now stands at 6.5 per cent.

NBG explains that changes to the monetary policy rate rely on the current and expected developments in the economy and financial markets. While formulating the monetary policy the MPC takes into account the projected inflation rate.

If projected inflation is above the target inflation rate, the NBG will tighten monetary policy by raising the policy rate to combat a future surge in the general price level… when the current forecasts of inflation are below the target, the NBG will pursue an expansionary monetary policy by lowering the refinancing rate”, explained the NBG.

NBG says that starting the year 2019, and in line with the forecasts, the inflation rate remained around its target level of 3%. In February, the annual inflation equalled 2.3 per cent NBG says inflation is expected to fluctuate near the target level.

NBG will continue to monitor changes in the economy and financial markets and will use all the means and instruments at its disposal to ensure price stability.