The Monetary Policy Committee of National Bank of Georgia (NBG), on October 23, decided to maintain the key refinancing rates at 8%.
The NBG notes the fact that inflation has been below the 3% target ever since the start of the year. In September, core inflation was 0.8%, while the annual price level increased by 0.6%. The National Bank stresses that its monetary policies, which were timely tightened and gradually normalized, have helped stabilize long-term expectations of inflation, especially for goods produced domestically. Low inflation was also a result of increased competition and reduced corporate margins. The NBG also notes the economic growth, which is forecast at 8.5% in 2023, has increased production potential and eased price pressures. The National Bank anticipates that inflation will average 1.2% by 2024, and stabilize at around 3.0% in the medium-term.
The National Bank of Georgia emphasizes increased local and international uncertainties that pose risks and pressure on prices, despite positive trends. The volatility of oil and food prices, as well as the higher transportation costs due the events at the Red Sea, all add to inflationary risk. A strong domestic economy could also drive up prices. The NBG keeps its policy rate at 8 percent to maintain inflation near its target. The policy rate can be reduced or tightened depending on inflation risks.
The next meeting of Monetary Policy Committee is scheduled for December 18.
Also Read:
* 30/07/2024 NBG keeps key refinancing rate unchanged at 8%
* 19/06/2024 NBG keeps key refinancing rate unchanged at 8%
* 22/05/2024 NBG Reduces Key Financing Rate From 8.25% To 8%
* 13/03/2024 NBG Reduces Key Financing Rate From 9% To 8.25%
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