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
European Union increases humanitarian aid to Syria to €202mn
The European Union announced on May 27 an increase in humanitarian aid to Syria to more than €202mn for this year, SANA reported. The additional funding will ... more
MBH Bank Tier 2 bond sale oversubscribed 3.5 times
Hungary’s MBH Bank has completed a successful €200mn Tier 2 bond issuance amid strong investor appetite. The ten-year notes, callable after five years, are priced with a 6.875% coupon following ... more
Most Read
-
Putin to skip Rio BRICS summit over ICC warrant as Xi signals no-show
13 days ago
-
Turkey yet to prove rare earth deposit has suggested “giant” potential despite reported processing talks with China
10 months ago
-
Uproar in Mongolia as development bank reveals scale of risky loans and NPLs
3 years ago