Georgian central bank leaves monetary policy rate unchanged at 11%
The NBG explained that the Russian invasion of Ukraine had created “new risks” for the economy, leading to the decision of the Committee that makes decisions on changes to monetary policy on “current and expected developments”. Photo: Nino Alavidze/Agenda.ge.
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The National Bank of Georgia is keeping the refinancing rate unchanged at 11 percent following a meeting of its Monetary Policy Committee on Wednesday.
The NBG explained that the Russian invasion of Ukraine had created “new risks” for the economy, leading to the decision of the Committee that makes decisions on changes to monetary policy on “current and expected developments”.
In particular, the sanctions imposed on Russia due to its military actions, and supply-side disruptions, have significantly increased prices on a number of product categories on international markets,” the Bank noted.
Therefore, inflation has increased significantly both in developed and developing economies. The global surge in prices has been transmitted to the Georgian market as well and, despite the slowdown compared to the beginning of the year, inflation in Georgia remains high at 12.8 percent,” the NBG said.
The forecast of the institution said inflation would remain high over the course of the year, before starting to decline "as last year’s one-off effects are phased-out and given the monetary policy remains tight."
The next meeting of the Monetary Policy Committee will be held on June 22.
The Georgian finance system’s joining of the international sanctions imposed against Russia due to its invasion of Ukraine has been praised by the international regulators, Koba Gvenetadze, the Head of the National Bank of Georgia said on Wednesday.
The Consumer Price Index in Georgia grew by 1.8 percent in April 2022 month-on-month, while the annual inflation rate totalled 12.8 percent, the National Statistics Office of Georgia announced on Tuesday.
The need for the central banks’ “vigilance” and monetary authorities’ “strong reaction” to a prolonged high inflation were the subjects raised by Koba Gvenetadze, the Head of the National Bank of Georgia, at a conference organised by the Columbia University, the Bank announced on Tuesday.
The National Bank of Georgia anticipates an average of nine percent inflation in the country this year, Koba Gvenetadze, the head of the Bank, said on Wednesday.
Remittances to Georgia from abroad equalled $308.1 million in April, marking a 58.8 percent increase compared to the same period of last year, the National Bank of Georgia revealed on Monday.
The Consumer Price Index in Georgia increased by 1.1 percent in May 2022 month-on-month, while the annual inflation rate equaled 13.3 percent, the National Statistics Office of Georgia announced on Friday.
Inflation in the Georgian economy will remain close to the target in the middle of 2023 “if there are no shocks,” Archil Mestvirishvili, the Vice President of the National Bank of Georgia, said on Monday at a meeting of the Sector Economy and Economic Policy Committee in Parliament.
Georgia received $505.7 million from abroad in May 2022, which is 169.4 percent more than the amount in May 2021, says the National Bank of Georgia.