“Low” inflation due to int’l food price decrease, strict monetary policy - National Bank
The National Bank of Georgia on Monday said gradual decreases in international food prices and maintenance of its strict monetary policy had led to a “low” domestic inflation rate. Photo: Nino Alavidze/Agenda.ge
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The National Bank of Georgia on Monday said gradual decreases in international food prices and maintenance of its strict monetary policy had led to a “low” domestic inflation rate.
Statistics showed the annual inflation amounted to 0.8 percent in October, while monthly inflation posted a 0.6 percent increase.
The central bank said the “strong position” of the national currency also contributed to the low rate and said the average exchange rate against the US dollar depreciated by 0.9 percent month-on-month in September. At the same time, the currency strengthened by 1.1 percent against the Euro.
At the end of the month, the official exchange rate of the lari against the US dollar and the Euro was 2.6783 and 2.8422 respectively.
Nominal and real effective exchange rates of lari continue to strengthen annually. Annually, in September, the real effective exchange rate of the lari strengthened by 10 percent, and the nominal effective exchange rate by 23.6 percent [...] The strengthening of the effective exchange rate has a negative impact on the country's competitiveness, although it reduces imported inflation”, said the NBG.
The biggest impact on the overall price level was made by fuel price increases in October, the Bank said.
Petrol and diesel prices rose by 9.8 percent and 9.3 percent, respectively, and their total contribution to the monthly inflation rate was 0.5 percentage points”, it said.
Year-on-year decrease in prices of food and non-alcoholic beverages (-1.2 percent) and medicines also contributed to reduction of inflation, the NBG added.
The National Bank noted the low inflation was also caused by deflation of imported and mixed goods, which, along with the “relative stability” of commodity products and transportation prices on international markets, was facilitated by the “solid” position of the “real effective” exchange rate.
Cost of transport, clothing, footwear, alcoholic beverages and tobacco increased in Georgia to influence the October inflation rate, which posted a 0.6 percent month-on-month increase, the National Statistics Office of Georgia on Friday said.
Costs of healthcare and transport across Georgia decreased in September and rose for housing, water, electricity, gas and various goods and services, the latest inflation data published by the National Statistics Office of Georgia on Tuesday shows.
The National Bank of Georgia on Wednesday decreased the refinancing rate by 0.25 percentage points to 10.25 percent after monitoring developments in the domestic economy and financial markets.
The National Bank of Georgia on Wednesday said even though inflation was “still high” in the country, the trends were following a “downward trajectory”, with the numbers expected to remain below the “target level” in the second half of the year.
Natia Turnava, the Acting Governor of the National Bank of Georgia, on Friday said access to finances was a “critical factor” for the success of micro, small and medium enterprises, in comments during the signing of a cooperation agreement between the domestic Terabank and the Netherlands Development Bank.
The National Bank of Georgia on Monday hosted a working meeting with representatives of the national banks of Uzbekistan and Kazakhstan to share its monetary policy experience at the request of the International Monetary Fund.
Prices of certain food products and non-alcoholic beverages, furnishings, household equipment and maintenance, as well as healthcare decreased month-on-month across Georgia in November, the National Statistics Office said on Monday.
Georgian Economy Minister Levan Davitashvili on Tuesday said there were “no preconditions” for an increase in the commercial gas tariff causing a rise in bread prices across the country.
The National Bank of Georgia on Wednesday said its Monetary Policy Committee had decided to decrease the refinancing rate by 0.5 percent, to 9.5 percent, following a “more pronounced” reduction in the domestic inflation rate than anticipated.