On March 17, the Monetary Policy Committee of the National Bank of Georgia decided to increase the refinancing rate by 50 basis points. The monetary policy rate was set at 8.50%.
The NBG says annual inflation in February amounted to 3.6%.
“Taking into account the global pandemic and other factors, the Committee decided to tighten monetary policy and increase the rate by 50 basis points. However, at this stage, there is no need to further tighten the policy during the year,” reads the statement.
The National Bank says economic activity decreased by 11.5% annually in January.
“Against the background of easing restrictions, a gradual recovery of economic activity is expected throughout the year, the main driving force of which will be local demand. In contrast, foreign demand will remain significantly reduced. Regarding the current figures, revenues from international travelers are minimal and fell by 95% year-on-year in January. Against the background of weak aggregate demand and the depreciated exchange rate, based on the preliminary data, imports of goods fell by 12% year on year in February, while exports improved slightly and increased by 3%.
“The National Bank of Georgia monitors the current economic processes and financial markets on a continuous basis and will use all the tools at its disposal to ensure price stability.
“The next meeting of the Monetary Policy Committee will be held on April 28, 2021,” reads the statement.