Central bank keeps refinancing rate at 11%, says inflation to remain high this year
The NBG said it expected inflation to gradually reduce following "positive trends observed in international commodity markets". Photo: Nino Alavidze/agenda.ge
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The national bank of Georgia has decided to keep the refinancing rate unchanged at 11 percent following a meeting of its monetary policy committee on Wednesday.
The financial institution said the domestic inflationary pressure was still high (amounting to 11.5 percent in September) despite the fact that inflation had retreated from its peak.
The NBG said it expected inflation to gradually reduce following "positive trends observed in international commodity markets".
Commodity prices and international shipping costs are declining [...] The international food price index [...] has been falling for six consecutive months. It is expected that in line with the appreciated exchange rate, these trends will gradually be transmitted to the local market, reducing inflation. However, given the current geopolitical circumstances, uncertainty still remains high”, the NBG said.
The forecast of the institution said inflation would remain high until the end of the year, but would continue to gradually decline and approach the target level in the second half of 2023.
Taking into account the existing inflationary risks, a tight monetary policy will be maintained, and its normalisation will gradually begin only after a clear trend of decreasing inflation is observed", the bank said.
The NBG said it would continue monitoring developments in the economy and financial markets to ensure price stability.
The next meeting of the monetary policy committee will be held on December 21.
Commercial banks in Georgia loaned ₾42.94 billion ($15.62bln) and received deposits of ₾42.04 billion ($15.29 bln) in September 2022, the latest data from the National Bank of Georgia shows.
Georgian Prime Minister Irakli Garibashvili on Monday announced amendments to the country’s budget bill to reduce its foreign debt to 40 percent of the gross domestic product, and budget deficit to 3.2 percent of the GDP, crediting the “unprecedented, double-digit” economic growth for enabling the moves.
The National Bank of Georgia has decided to keep the refinancing rate unchanged at 11 percent following a meeting of its Monetary Policy Committee on Wednesday.
The Georgian Government has decided to create micro banks in the country in an effort to offer “increased opportunities” for financing small entrepreneurs and allocate new “credit opportunities” in the field of agriculture, Lasha Khutishvili, the Georgian Finance Minister, announced on Monday.
Koba Gvenetadze, the governor of the national bank of Georgia, on Wednesday said the financial institution expected domestic inflation to begin to decline from February and approach the target level in the second half of 2023.
The national bank of Georgia hosted the Sustainable Finance Forum on Wednesday, bringing together over 300 attendants from 55 countries including senior officials of central banks, local financial institutions, international organisations, private and public sector representatives, universities and other stakeholders.
Commercial banks in Georgia loaned ₾43.24 billion ($15.87bln) and received deposits of ₾42.31 billion ($15.53bln) in October 2022, the latest data from the National Bank of Georgia shows.
The prices of food, transportation, housing, water, electricity, gas and other fuels increased in Georgia in November month-on-month, according to the latest inflation data from the National Statistics Office of Georgia.
Prices on food, alcoholic beverages, housing, water, electricity, gas and other types of fuel increased in Georgia in December month-on-month while prices for transportation decreased, the latest inflation data from the National Statistics Office of Georgia shows.