The National Bank of Georgia decided to lower the refinancing rate to 10% from 10.25% on September 13, the bank said in a press release.
"The role of external factors in the formation of inflation has eased significantly. In particular, since the previous year, prices of raw food commodities on international markets have decreased, and international shipping costs have approached almost its pre-pandemic levels. These, alongside with the appreciation of GEL, have reduced imported goods prices in Georgia," the bank said.
Tight monetary policy and low inflation expectations are also contributing significantly to the decline of inflation.
The current forecast sees inflation remaining below the 3% target level in the coming months of 2023 and staying close to it in the medium term. But despite these positive trends, inflation risks remain high, as the current tense geopolitical situation increases the uncertainty on commodities markets and credit activity in foreign currency has accelerated, the bank said.
"Considering these risks, the NBG continues a gradual exit from its tight monetary policy with cautious pace," the bank said.
