The National Bank of Georgia (NBG) raised its key refinancing rate by 50 basis points to 8% on December 16, announcing that a further increase "in the coming period" is unlikely. The regulator has increased interest rates from 4% in February to 8% in December in seven instalments in order to contain inflation.
Georgia's annual inflation reached 6.3% in November, up from 5.8% in October, and above the regulator's 5% target. This is the highest inflation rate that Georgia has experienced since August 2011. NBG expects it to come down to 5% in the second half of 2016.
The move comes after the US Federal Reserve increased its interest rate by 25 basis points to 0.4% on December 16, the first increase since 2006. However, NBG cited the higher-than-expected domestic inflation as the reason behind its increase. "The tightening of monetary policy by NBG must have a positive effect on the decrease in inflation expectations," its monetary policy committee said after a December16 meeting.
Related Articles
Saudi private sector secures 82% of development fund contracts worth $3bn
Saudi private companies have captured 82% of contracts signed by the Saudi Development Fund over the past three years, with a total value exceeding $3bn, according to Abdulmohsen Al-Khayyal, ... more
Construction work on $4.6bn Trans-Afghan Railway could reportedly be under way within six months
Construction work on the proposed Trans-Afghan Railway could be under way within six months, while the project could cost around $4.6bn to deliver and cut shipping transit times from Uzbekistan to ... more
Uzbekistan’s banking sector becoming more resilient, says Fitch
Uzbekistan’s banking industry is becoming more resilient, with the sector underpinned by ongoing structural reforms, stronger regulation and improving governance, ... more
Most Read
-
Renewable capacity growth is faster than ever, but more acceleration needed to meet Paris 2030 goal, says IEA
1 year ago
-
Kyrgyzstan abandons attempt to rescue Russian climber trapped on icy summit of country’s highest mountain
23 days ago
-
BERTRAND: China after Communism, preparing for a post-CCP China
1 month ago
-
Hungarian economy faces weak growth, slow path to price stability, central bank report shows
2 months ago
-
UKRAINE REMONT: The battle to build: signs of recovery in Ukraine's construction industry
5 months ago