National Bank of Georgia raises policy rate by 50 bps to 7%

By Richard Connell

New York, Sept. 15 - The Monetary Policy Committee of the National Bank of Georgia elected to lift its Main Policy Rate by 50 basis points to 7% at its meeting on Wednesday, according to a news release issued by the bank.

Annual inflation reached 9½% in August, caused largely by higher prices in agricultural products, while core inflation rose in August as well.

The committee forecast a higher estimate for growth in the economy of Georgia of up to 6%, a result it said of fiscal stimulus and expanded lending.

The committee also noted that prices in global commodity markets have increased recently, and that inflation has risen in all of Georgia's neighboring countries.

While raising the policy rate to 7%, the committee noted that high inflation is caused largely by external factors, "for which monetary policy has limited influence."

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