NBG keeps its main policy rate unchanged at 8 percent

Georgia, Tbilisi, March 17 / Trend, N.Kirtskhalia /
The National Bank of Georgia (NBG) decided to keep its Main Policy Rate unchanged at 8 percent, the NBG said. The decision was taken by the Monetary Policy Committee on Thursday.
According to the NBG, annual inflation reached 13.7 percent in February 2011. In February consumer prices grew by 2.8 percent. As in the recent months, the inflation in February was caused mainly by an increase in food prices, accounting for 12.4 percentage points of the total annual inflation. At the same time the prices in the services' sector grew only by 1.9 percent.
The NBG states that the inflation caused by the external shocks is a temporary phenomenon. "According to the current forecasts it is expected that the inflation rate will start decreasing in several months' time," the report says.
The monetary tightening pursued recently by the National Bank has already started to influence the economy, which was reflected in the decrease of both lari and foreign currency loans' growth rates.
"As a result the seasonally adjusted growth rate of broad money aggregates has been close to zero since the beginning of the year, whereas respective annual growth rates have been decreasing. Recently the prices for certain food products (wheat and sugar) and oil prices on the world markets have been slightly declining. In case such trend will prevail the consumer prices in Georgia are expected to decrease," the NBG said.
The next meeting of the Monetary Policy Committee will take place on April 13, 2011.