Dollarization could reduce monetary policy rate in Georgia

Business Materials 23 December 2020 13:54 (UTC +04:00)
Dollarization could reduce monetary policy rate in Georgia

BAKU, Azerbaijan, Dec. 23

By Tamilla Mammadova – Trend:

If dollarization had been lower in Georgia, it could reduce the monetary policy rate, said Koba Gvenetadze, president of the National Bank of Georgia (NBG), Trend reports via Georgian media.

According to the NBG president, the situation might be monitored and further tightening might become necessary. He noted that tight monetary policy could be maintained for a longer period of time.

However, the National Bank keeps the refinancing rate at 8 percent after September 16, 2020. In the first half of 2020, the NBG gradually reduced the tightened refinancing rate, which had increased up to 9 percent in late 2019.

The president of the National Bank said that the inflation rate will approach the target by the second half of 2021.

"Annual inflation is set at 3.8 percent in recent months. As of the current forecast, the inflation rate will move close to the target level in the first half of 2021 under other equal conditions. The inflation dynamics are mainly determined by the weak aggregate demand and it is expected that this impact will continue next year, " the final report of the NBG Monetary Policy Committee reads.


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