The National Bank of Georgia is keeping the refinancing rate unchanged at 11% following a meeting of its Monetary Policy Committee on May 11.
The NBG explained that the Russian invasion of Ukraine had created “new risks” for the economy, leading to the decision of the Committee that makes decisions on changes to monetary policy on “current and expected developments”.
“In particular, the sanctions imposed on Russia due to its military actions, and supply-side disruptions, have significantly increased prices on a number of product categories on international markets,” the bank noted.
“Therefore, inflation has increased significantly both in developed and developing economies. The global surge in prices has been transmitted to the Georgian market as well and, despite the slowdown compared to the beginning of the year, inflation in Georgia remains high at 12.8%,” the NBG said.
The forecast of the institution said inflation would remain high over the course of the year, before starting to decline “as last year’s one-off effects are phased-out and given the monetary policy remains tight”.
The next meeting of the Monetary Policy Committee will be held on June 22. (Agenda/Business World Magazine)