Interest Rate Cut by the National Bank of Georgia

September 13, 2023

The National Bank of Georgia implemented its third interest rate cut of 2023, lowering such by 25 basis points to 10.0%. The cut matches a 25-bp move done last month after an initial 50-basis point reduction in May. Previously, the rate had been increased from 8.0% to 10.5% during 2021 and by 50 basis points to an 11.0% peak in March 2022. Consumer price inflation in Georgia had decelerated from a 127-month peak of 13.9% in December 2021 to 0.3% in July 2023. Such rose to 0.9% in August and is projected to hover just below the 3% target in the medium term. Core inflation stands currently at 2.7%, a 54-month low, but a statement released by monetary officials identifies risks in the outlook. “inflation risks remain high. The current tense geopolitical situation increases the uncertainty on the commodities markets. In terms of inflationary pressures, along with external risks, domestic economic trends are still noteworthy…. Other things being equal, the NBG will continue to normalize the policy rate only at a moderate pace.”

Copyright 2023, Larry Greenberg. All rights reserved. No secondary distribution without express permission.



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