Full Percentage Point Interest Rate Hike by Georgia’s Central Bank
April 28, 2021
The National Bank of Georgia, like central banks in Russia and Ukraine earlier, today announced its second interest rate increase of 2021. Georgia’s one-week refinancing rate was lifted by 100 basis points to 9.5%, exceeding the end-2019 level of 9.0%. The policy rate had been reduced three times last year between April and August and by a full percentage point is total. In the face of rising and above-target inflation, an initial 50-basis point rate hike was engineered last month. The inflation rate is currently at 7.2%. A released statement identifies a number of factors boosting price pressure: higher oil and food commodity costs, elevated costs of production, and Georgia’s increasingly dollarized economy. Officials conclude with a pledge to “use all available tools to ensure price stability.”
Copyright 2021, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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