Georgia, Tbilisi, Nov 21 /Trend N.Kirtskhalia/
Monetary Policy Committee of the National Bank of Georgia decided to reduce the refinancing rate by 25 basis points to 5.5 percent on Wednesday. Inflation and core inflation were low in October, the National Bank told Trend.
Annual inflation was 0.1 percent. The forecast of inflation reduced since the previous meeting of the Committee. According to the updated forecast, it is expected that inflation will increase next year, but will remain below the target level.
Preliminary indicators of economic growth in October, show a decrease in demand, which affects the prices towards their reduction. Fiscal consolidation, which will have a positive impact on price, will continue in 2013.
There was a growth trend in the current account deficit in the first half of the year. Deepening of the trade deficit continued in the third quarter. Slowdown in remittances, which is significantly affected by the economic crisis in Europe, also contributes to the expansion of the current account deficit.
The National Bank has decided to reduce the rate of monetary policy due to the fact that inflation figure was behind the target in the medium-term.
The National Bank of Georgia will continue to monitor the current economic developments and financial markets and to take appropriate action.
The next meeting of the committee of monetary policy will be held on December 19.