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The National Bank of Georgia raised its refinancing rate by 100bps to 8.5 percent on October 23rd 2019, bringing borrowing costs to its highest since November 2008. It follows two 25bps hikes in the previous month in an attempt to neutralise inflationary pressures due to exchange rate depreciation. Policymakers noted that annual inflation rose to 6.4 percent, its highest since December 2017, and it is expected to remain above the 3 percent target this year and to start declining from March 2020. The central bank added that monetary policy tightening will continue until the pressure on the exchange rate is eliminated.

The National Bank of Georgia raised its refinancing rate by 50bps to 7.5 percent at an extraordinary meeting on September 25th 2019, in an attempt to neutralise inflationary pressures as the result of the exchange rate depreciation. It follows a similar hike in the prior meeting in the beginning of the month. Policymakers added that monetary policy tightening will continue until the pressure on the exchange rate is eliminated and referred to the possibility of more extraordinary meetings if necessary.

The National Bank of Georgia raised its refinancing rate by 50bps to 7 percent on September 4th 2019, after inflation rate jumped to 4.9 percent, its highest since December of 2017. It is the first hike in interest rates this year and follows two cuts, in the January and in the March meeting. Policymakers added that inflation expectations are exacerbated by the depreciation of the nominal exchange rate and that monetary policy tightening will continue until the pressure weakens. The central bank expects inflation to remain above the 3 percent target this year and to start decline from March 2020.

The National Bank of Georgia left its refinancing rate unchanged at 6.5 percent on July 24th 2019, saying inflation will stay above the target level this year and will start to decrease from March next year. In June, annual inflation rate fell to 4.3 percent from a 4.7 percent in May, in line with central bank estimates, however, if the pressure in inflation rate continues, the board will consider an interest rate cut.

The National Bank of Georgia left its refinancing rate unchanged at 6.5 percent on June 12th 2019, saying inflation rate will start to decrease to the central bank’s target of 3 percent at the beginning of the next year. In May, annual inflation rate jumped to 4.7 percent from 4.1 percent in April, the highest since December of 2017, due to a one-time event caused by the increase in excise taxes.

The National Bank of Georgia left its refinancing rate unchanged at 6.5 percent on May 1st 2019, after a 25bps cut in the March meeting. Policymakers kept borrowing costs at its lowest since December of 2016 mentioning a stable inflation rate around the target level of 3 percent. In March, annual inflation rate rose to a 14-month high of 3.7 percent from 2.3 percent in February. The central bank added that the normalization of monetary policy will be carried out gradually.