National Bank of Georgia lowers its policy rate

The Monetary Policy Committee (MPC) of the National Bank of Georgia (NBG) decided to lower its main policy rate (the refinancing rate) by 25 basis points to 7.5 percent.

Consumer price index decreased by 1.5 percent in July, 2011 compared to the previous month. The annual inflation rate hit 8.5 percent. The share of food remains high in the annual rate of inflation and amounts to 6.7 percent. The core inflation net of food and energy hit 0.03 percent in July. The inflation in service sector hit 1.2 percent.

In the recent months inflation shows faster decrease than it was expected earlier.

Presumably, by the end of this year the inflation will fall below the target level and remain low in the first half of the next year.

Based on this, NBG continues monetary policy easing, started last month, in order to maintain the inflation at the target level in the medium term.

The next meeting of the MPC will be held on Sept. 14, 2011.


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