Georgia, Tbilisi, Dec. 21 / Trend N. Kirtskhalia /
The monetary policy committee of the Georgian National Bank has today decided to reduce the refinancing rate by 25 basis points up to 6.75 percent.
In November, the tendency of reducing the annual inflation rate continued. Its level was 1.9 percent. The basic inflation is low (excluding food and energy). It hit 0.4 percent.
The growth rate of the real economy increased by 7.5 percent in the third quarter of this year. But the deviation from the potential level of total production is again negative. This indicates that the growth of joint demand does not contain inflation risks.
The rate of lending to the economy by the banks decreased in the fourth quarter. It will reflect the weakening of the global production. As these trends indicate a weakening of demand, the forecast index of inflation decreased.
According to the current forecast, the inflation will remain low in the first half of next year. As a result, the monetary policy committee decided to continue the policy of mitigation and reduced the refinancing rate by 25 basis points.
The National Bank will follow the economic processes and the financial markets and make decisions in the future.
The next meeting of the monetary committee will be held on January 18, 2012.