Central bank increases refinancing rate to 11%
The NBG said it “continuously monitored” the developments in the economy and financial markets and would use “all available tools to ensure price stability.” Photo: Nino Alavidze/Agenda.ge
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The National Bank of Georgia (NBG) has decided to increase the refinancing rate by 0.5 percentage points to 11 percent on Wednesday at its Monetary Policy Committee (MPC).
Increased risks of high inflation expectations, and inflation being above the target for a prolonged period of time were named as reasons for increasing the rate, with the NBG noting the MPC would keep a “tightening bias until the risks of rising inflation expectations are sufficiently mitigated.”
The central bank also said the ongoing war in Ukraine and sanctions imposed against Russia had led to high global inflation, increasing the prices of a number of product categories on world markets.
It further noted the “sharp rise” in fuel prices was expected to have a “significant impact” on inflation by translating into higher inflation expectations. The Bank added the trend would begin to decline from March but would remain above the target during the year.
The annual inflation rate in February totalled 13.7 percent.
The NBG said it “continuously monitored” the developments in the economy and financial markets and would use “all available tools to ensure price stability.”
The credit activity is expected to be moderately high during the year, despite tightened monetary policy and recent macroprudential measures,” the Bank noted.
The NBG also reduced its expectations regarding the economic growth of Georgia in 2022 from 5 percent to 3-4 percent.
Amid the expected slowdown in economic growth, the inflationary pressure stemming from the aggregate demand will be weak, and supply-side factors will remain dominant throughout the year,” the Bank pointed out.
In 2021, the real growth of the gross domestic product of Georgia increased by 10.4 percent, while in January this year the increase amounted to 18 percent year-on-year.
The non-governmental organisation Society and Banks said 191,800 loans tied to floating interest rates remained active as of March 1, with the total volume of these loans amounting to 8.55 million GEL ($2,780/€2,498).
The next meeting of the MPC will be held on May 11.
Georgia’s annual inflation will come down to “single digits” by the end of 2022, Papuna Lezhava, the Vice President of the National Bank of Georgia, said on Monday.
The nominal gross domestic product (GDP) of Georgia amounted to 60.23 billion GEL ($18.7bln/€16.94bln) in 2021, up by 22.3 percent year-on-year, while the real growth of GDP also increased by 10.4 percent, the preliminary data from the National Statistics Office of Georgia (Geostat) show.
The Consumer Price Index in Georgia increased by 0.9 percent in February 2022 month-on-month, while the annual inflation rate totalled 13.7 percent, the latest inflation data of the National Statistics Office of Georgia (Geostat) shows.
The National Bank of Georgia (NBG) has decided to keep the refinancing rate unchanged at 10.5 percent at a meeting of the Monetary Policy Committee (MPC) earlier today. A “particular concern” for increased inflation was named by the bank in its comments, with the Consumer Price Index growing by 0.3 percent in December 2021 and the annual inflation rate amounting to 13.9 percent in the country.
The estimated real Gross Domestic Product (GDP) of Georgia increased by 14.6 percent in February 2022 year-on-year, while the average real GDP grew by 16.3 percent in January-February, the latest data from the National Statistics Office of Georgia (Geostat) shows.
Georgia’s gross external debt has reached $21.8 billion as of December 31, 2021, accounting for 116.8 percent of its 2021 annual gross domestic product (GDP), the National bank of Georgia (NBG) announced.
The net international investment position (IIP) of Georgia, which measures the difference between external financial assets and liabilities of a country, totalled negative $26.3 billion as of December 31, 2021, the National Bank of Georgia announced on Thursday.
The Consumer Price Index in Georgia increased by 2.5 percent in March month-on-month, while the annual inflation rate equalled 11.8 percent, the National Statistics Office of Georgia (Geostat) announced on Monday.
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 totalled $193.1 million in March 2022, posting a 2.6 percent increase year-on-year, the National Bank of Georgia revealed on Friday.
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.
Commercial banks in Georgia loaned ₾43.32 billion ($14bln/€13bln) and received deposits of ₾37.10 billion ($12bln/€11bln) in March 2022, the latest data from the National Bank of Georgia shows.
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 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.
Commercial banks in Georgia loaned ₾43.15 billion ($15bln/€14bln) and received deposits of ₾37.23 billion ($13bln/€12bln) in April 2022, the latest data from the National Bank of Georgia shows.
Commercial banks in Georgia loaned ₾43.12 billion ($14.67bln/€13.86bln) and received deposits of ₾37.15 billion ($12.64bln/€11.94bln) in April 2022, the latest data from the National Bank of Georgia shows.
Commercial banks in Georgia loaned ₾43.65 billion ($14.85bln) and received deposits of ₾38.27 billion ($13.02bln) in June 2022, the latest data from the National Bank of Georgia shows.
Commercial banks in Georgia loaned ₾42.09 billion ($14.85bln) and received deposits of ₾38.75 billion ($13.67bln) in July 2022, the latest data from the National Bank of Georgia shows.
Remittances to Georgia from abroad hit $334.3 million in August, a 63.1 percent increase on the corresponding figure from the same month of last year, the National Bank of Georgia said on Thursday.
Commercial banks in Georgia loaned ₾43.21 billion ($15.30bln) and received deposits of ₾41.76 billion ($14.78 bln) in August 2022, the latest data from the National Bank of Georgia shows.
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.