National Bank of Georgia again holds refi rate at 8%

TBILISI. Dec 17 (Interfax) - The National Bank of Georgia's Monetary Policy Committee has decided for the eighth time this year to hold the monetary policy or refinancing rate at 8% per annum, the NBG said in a press release.

"Given the high uncertainty, upside risks to inflation are more pronounced, while downside risks continue to remain. Upcoming decisions on the monetary policy rate will depend on updated data and the realization of risks. According to the central scenario, the NBG will continue the normalization of monetary policy only after the current one-off factors have been fully dissipated and inflation converges the target level," the NBG said.

"However, should inflation persist above the target for an extended period due to various one-off factors, the Monetary Policy Committee stands ready to maintain the current tight stance for longer than expected and, if necessary, to tighten it further," it said.

The regulator said annual inflation slowed to 4.8% in November from 5% in October. It said rising food prices were the main cause of inflation. Long-term inflation expectations remain stable within the target range of 3%.

In the NBG's central scenario, inflation is projected to average 4% in 2025, and from the second quarter of 2026 it is expected to converge toward the target, averaging 3.5% on an annual basis.

The main inflationary risks include ongoing growth in food prices, which could lead to increased inflation expectations, a possible rise in oil prices in the region amid the geopolitical situation and disruptions to the international supply chain.

The Monetary Policy Committee will hold its next meeting on February 11.

The NBG lowered the rate three times in the first half of last year, by 0.25 pp on May 22, 0.75 pp in the middle of March and 0.5 pp in January, as inflation slowed. The rate has been 8% since June 19 last year.