Georgian National Bank keeps rate of monetary policy at 6 percent
Georgia, Tbilisi, Sept. 16 / Trend , N.Kirtzkhalia/
The rate of monetary policy remained on the old mark - 6 percent. According to the National Bank of Georgia, the monetary policy committee has passed this decision today.
In August, the annual inflation rate stood at 3.1 percent, the average annual inflation rate - 3.3 percent. According to the committee, such a sharp drop in annual inflation rate has been caused by basis effect.
In particular, in August 2008, as a result of the Georgian-Ossetian conflict, prices for foodstuffs rose, but in the following months, they gradually returned to their original positions. It is expected that annual inflation will increase by late 2009 and positive rate of inflation will be fixed during this period. In August, annual growth rate of broad money M3 has been positive since January this year and this signals green shoots in the country's economy over the last period.
The committee is expected to reduce interest rates. This process began in September.
Today, for the first time since 2005, at the auction of the National Bank an annual government treasury bonds has been sold that linked the almost annual curve of interest rates. This curve will orient interest rates of assets, denominated by lari and assist in developing the securities market, the monetary policy committee said.
The depreciation of the real effective exchange rate over the past year helped to reduce imports and to activate the local economy, which reduced the trade deficit.
The next monetary policy committee meeting will take place on Oct. 14.