National Bank of Georgia holds refi rate at 8.25%, as expected

TBILISI. Sept 9 (Interfax) - The National Bank of Georgia's Monetary Policy Committee has again decided to hold the monetary policy or refinancing rate at 8.25% per annum, the NBG said in a press release

Georgia's two biggest investment banks, Galt&Taggart and TBC Capital, had expected this decision, despite the intensification of inflationary factors, in particular the rise in the cost of petroleum products.

"Taking into account the current macroeconomic environment and prevailing risks, the MPC decided to keep the monetary policy rate unchanged. The moderately tight monetary policy stance aims to minimize risks related to inflation expectations and second-round effects, ensuring that inflation returns rapidly to the 3% target once the supply shock dissipates," the NBG said.

The NBG will continue to increase the monetary policy rate moderately in the event of an upward trend in inflation expectations. Once the inflationary shock dissipates, the NBG will gradually begin to normalize its monetary policy stance.

In August 2026, headline inflation in Georgia stood at 5.6%, above the 3% target, with rising energy prices making a significant contribution amid renewed geopolitical tensions in the Middle East, the NBG said.

In August, core inflation stood at 3.6%, while services inflation was 4.4%. "These developments suggest that, despite the supply shock, its impact on inflation expectations remains moderate. However, a prolonged shock increases the risk of its transmission to inflation expectations, making second-round effects an important factor to monitor," the regulator said.

In light of this, the NBG affirmed its July forecast for 5.2% inflation this year as a whole.

The Monetary Policy Committee's net rate-setting meeting takes place on October 21.

The NBG on July 29 decided to hold its refinancing rate at 8.25% per annum for the second time, after raising it by 0.25 pp in early May. The regulator also raised its 2026 inflation forecast to 5.2% from 4.9% and warned that, given rising inflation risks, tight monetary policy would remain in place for an extended period.

The NBG hiked the policy rate a quarter percent from 8% on May 6 as inflation accelerated due to the higher cost of imported fuel amid the Middle East crisis. The rate had been 8% since June 19, 2024.