The National Bank of Georgia left its refinancing rate unchanged - at 9%.
“If the decline in external and domestic demand will be so strong and long-lasting that, despite the depreciation of the currency, it will create a downward pressure on inflation, the NBG will start to ease monetary policy stance. Hence, considering high level of uncertainty, the Monetary Policy Committee deemed it appropriate to leave the interest rate unchanged at this stage and to maintain a tight monetary policy.
In addition, we approached the International Monetary Fund to increase access to funding in the near future under its Extended Fund Facility program. Moreover, additional funds will be allocated by other international donors to mitigate the effects of the coronavirus pandemic. Overall, it will help eliminate the external imbalance and will positively impact the nominal effective exchange rate and, consequently, the medium-term inflation dynamics.
The NBG continues to actively monitor the developments in the economy and along with the release of new data that will allow us to better assess the situation, the NBG will use all available tools to ensure price stability.
The next meeting of the Monetary Policy Committee is scheduled on April 29, 2020. However, if necessary, the Committee will consider the possibility of extraordinary meeting”, - reads the statement of the National Bank.