National Bank of Georgia reduces refinancing rate

The National Bank of Georgia announced a “gradual exit” from its tight monetary policy, as it decreased the refinancing rate by 0.5%, to 10.50%, following a reduction in the domestic inflation rate.

The Bank said inflation in the country was on a “downward trajectory”, mostly driven by reduced prices on international commodity markets and decreased international shipping costs that had gone down to their pre-pandemic levels. 

"After a prolonged period of high inflation, inflation being below the target in the short run will help further normalisation of long-term inflation expectations. The latter, in turn, is a prerequisite for price stability”, it said.

The NBG said while inflationary pressures coming from international markets had been neutralised, domestic inflation was also declining “even if at a relatively slow speed, and is expected to keep this downward trend throughout the year”.