Mar 13, 2019

NBG cuts monetary policy rate by 0.25 PP to 6.5%

Quick Update

  • On its 13th of March meeting, the Monetary Policy Committee of the National Bank of Georgia decided to continue policy easing and delivered another 0.25PP reduction of the policy rate. Currently monetary policy rate stands at 6.5%.
  • Throughout 2018 and beginning of 2019 inflation remained mostly close but below the NBG’s target. According to the Central Bank, risks to inflation stemming from external sector have decreased and this along with the weak demand-side pressures led the MPC to continue the policy normalization path. Further easing of the monetary policy will be subject to the pace at which the negative output gap closes.
  • In addition, the committee decided to increase the reserve requirements for FX funds by 5 percentage points with the aim to increase the cost of FX financing encouraging the “Larization” process.
  • Next MPC meeting is scheduled on the 1st of May 2019.