Georgia, Tbilisi, Feb. 17 / Trend N. Kirtskhalia /
The Monetary Policy Committee of the Georgian National Bank decided to raise the monetary policy rate from 7,5 percent to 8 percent, the Georgian National Bank told Trend.
According to the information, it is explained by the growth of the annual inflation rate up to 12.3 percent in January.
The consumer prices in Georgia increased by 2,1 percent in January. "These figures exceed the target forecasts of the National Bank," the National Bank said.
The National Bank recommends to examine the reasons for such high inflation and its impact on raising prices in the medium term prospect. It is also noted that reducing of inflation by monetary instruments is possible in terms of sharp reduction in economic growth.
"The major part of consumption in Georgia falls to food. The prices on food increase. It creates a negative background. Therefore, the National Bank will start to conduct a tight monetary policy from spring to avoid the existing risks to inflation", the report said.
Over the last month, the commercial banks increased the interest rates on the loans allocated to them. It demonstrates tightening of monetary policy.
The National Bank notes that toughening of monetary policy will continue. It will affect the real economy soon.