Georgia, Tbilisi, Oct.28 / Trend, N.Kirtskhalia /
The Monetary Policy Committee (MPC) of the National Bank of Georgia (NBG) decided to increase its main policy rate (the refinancing rate) to 7.5 percent, which hit 9.8 percent in September of 2010 compared to the same period of 2009.
According to the Georgian National Bank, the increase in inflation was largely caused by exogenous factors.
"Thus, in order to reduce the inflation expectations and to reduce the inflation in the medium term to the target level of 6 percent, there is a need of monetary tightening," the Georgian National Bank's press release says.
In September, the National Bank raised monetary policy rate from 6.5 percent to 7 percent. In June, the rate, which since November 2009 has remained at 5 percent, was increased to 6.25 percent, and in July - to 6.5 percent.