BAKU, Azerbaijan, March 6
By Tamilla Mammadova – Trend:
In February 2020, inflation reached 6.4 percent, National Bank of Georgia (NBG) told Trend.
"According to the forecast, other things equal, inflation will have declining trend over the rest of the year and will be close to target in the medium term," said NBG.
According to NBG, this will be ensured by monetary policy, which will remain tight until medium-term inflation expectations fall to the target level.
As the source said, following the depreciation of the nominal effective exchange rate and amplified inflation expectations, the National Bank of Georgia tightened the monetary policy during September-December 2019.
"The annual inflation rate in December 2019 stood at 7 percent and declined to 6.4 percent in January 2020. Along with one-off factors, the overshooting the target was caused by the increased pass-through from the nominal exchange rate depreciation to inflation in previous periods," said NBG.
As the bank noted, if further inflationary pressures evolve, NBG will respond accordingly.
“We use existing open market operations instruments such as refinancing loans, one-month open market instrument, auctions with certificates of deposit and treasury securities,” said the bank.
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