On December 8, 2021, the Monetary Policy Committee (MPC) of the National Bank of Georgia decided to increase the refinancing rate by 0.5 pp. The monetary policy rate is 10.5 percent.

 The extraordinary situation caused by the pandemic has created many challenges for the world economy, with high inflationary environment to be particularly concerning. Increased inflation remains one of the main recent issues for Georgia as well. Annual inflation slightly declined to 12.5 percent in November. Even though the recent inflation figure is mainly driven by temporary exogenous factors, it is high nevertheless. According to the preliminary estimates of the NBG, the contribution of such exogenous factors to the headline inflation is about 9 pp in November. A surge in consumer commodity prices on international markets is of particular importance, which is transmitted to the local market through imported raw materials and final goods. Although the exchange rate has appreciated relatively year-on-year, the imported inflation was 18 percent in November. The statistical methodological impact of the utility tax subsidy on current inflation is also noteworthy. As noted in previous committee decisions, it will have a temporary additional contribution to the annual inflation rate in December 2021 and January-February 2022.

Source: National Bank of Georgia

See detailed information: https://nbg.gov.ge/en/media/news/the-national-bank-of-georgia-raises-the-monetary-policy-rate-by-0-5-percentage-points-to-2