Georgian central bank’s monetary policy highlighted as “successful” at int’l conference

Economist Douglas Laxton on Friday highlighted the National Bank of Georgia’s “successful” approach to monetary policy, emphasising its sustained price stability and lower-than-target inflation rates, at an international conference organised by the NBG in the capital city of Tbilisi.

Laxton, who serves as an international consultant for the NBG, spoke at the event, entitled Shaping the Future of Monetary Policy, that was attended by leading economists from Georgia and around the globe.

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The NBG follows a risk-based monetary policy approach, which allows it to successfully maintain price stability. Due to its effective monetary policies, the bank manages existing risks well. In Georgia, inflation remains below the target, and price stability has been sustained for an extended period. Georgia is in a very good shape”, he said.

The conference also featured insights from Athanasios Orphanides, a professor at the Massachusetts Institute of Technology and former President of the Central Bank of Cyprus.

Orphanides praised the National Bank’s “commitment” to maintaining price stability as a “best practice” in central banking. He commended the decision to tighten monetary policy during the pandemic, asserting it had been a “timely and effective move”.

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Ensuring price stability is explicitly emphasised in the organic law governing the National Bank, which reflects best practices globally. The NBG was one of the first central banks to take the appropriate action by tightening monetary policy, and this was a positive step”, he said.

Throughout the conference, presentations were delivered by the Macroeconomics and Statistics Department staff of the NBG on challenges of monetary policy in small, open, developing economies.

The event also included panel discussions where both domestic and international economists analysed “pressing challenges” faced by economies and explored potential solutions and policy advancements.