Georgia's National Bank keeps refinancing rate at 10.5%

TBILISI. June 21 (Interfax) - The Monetary Policy Committee of the National Bank of Georgia decided on Wednesday to leave the refinancing rate unchanged at 10.5%, the rate to which it was lowered in May, a press release from the Bank said.

"Inflation in Georgia is slowing down, and in May this year, annual inflation fell to 1.5%, after falling 2.7% in April," the National Bank said.

The slowdown in inflation is largely due to the gradual elimination of exogenous shocks and lower prices for imported products, the National Bank said. In addition, the regulator's analysts believe that this trend is facilitated by the tightening of monetary policy and "a decrease in local inflation and inflation expectations."

Meanwhile, inflation is expected to remain below the target in the coming months and stabilize at around 3% over the medium term.

At the same time, inflationary risks remain high, despite positive trends, the press release said. The National Bank emphasizes that the current geopolitical situation remains the main source of uncertainty.

At the same time, the National Bank notes that economic activity in the country turned out to be higher than expected, with GDP growth in January-April reaching 7.7%.

The next meeting of the Monetary Policy Committee will take place on August 2, 2023.