NBG Keeps Key Refinancing Rate Unchanged at 8%

2026-02-11 - 12:17

The Monetary Policy Committee of the National Bank of Georgia (NBG) has decided to keep the key refinancing rate unchanged at 8%, maintaining what it describes as “a moderately tight monetary policy.” The rate has remained at this level since May 2024. In January, inflation stood at 4.8%, above the NBG’s 3% target. The Bank said the increase was largely due to rising food prices, which reflect higher costs for certain commodities on international markets and are passed on to Georgian consumers. However, the NBG noted that core inflation, which excludes food, energy, and tobacco, remained close to target at 2.1% in January, indicating what it called “the stability of long-term inflation expectations.” Under its main scenario, the National Bank said current inflation is “temporary,” with no expected spillover into broader prices. It expects inflation to gradually return to its 3% target from the second quarter, averaging 3.7% for 2026. The Monetary Policy Committee outlined two alternative risk scenarios that could affect future policy decisions. In a high-inflation scenario, the NBG said the recent rising “sticky” prices could push up long-term inflation expectations. Continued growth in highly productive sectors could add further pressure, and a worsening global geopolitical situation might drive higher-than-expected commodity prices, affecting domestic inflation. In a low-inflation risk scenario, strong growth in high-productivity sectors could boost supply and help inflation return to target more quickly. The NBG said this is supported by the domestic labor market trends that are putting downward pressure on prices. A weak U.S. dollar and falling global oil prices would add to the effect. The NBG said it will start normalizing monetary policy only after “the current one-off factors have been fully dissipated and inflation converges to the target level.” It added that if price pressures prove more persistent, “the MPC stands ready to maintain the current tight stance for longer than expected and, if necessary, to tighten it further.” The National Bank of Georgia projects the country’s economy will grow by 5% in 2026, with the “normalization of economic growth further supported by maintaining credit activity close to its equilibrium level.” The United Nations’ World Economic Situation and Prospects 2026 report projects slightly stronger growth of 5.4%, while both the European Bank for Reconstruction and Development and the Asian Development Bank forecast 5%. The next Monetary Policy Committee meeting is scheduled for March 25, 2026. Also Read: 04/02/2026 – Parliamentary Commission to Study Food, Medicine, Fuel Prices Established 26/01/2026 – NBG Says It Purchased $2.4 Billion Foreign Exchange In 2025 17/12/2025 – NBG Keeps Key Refinancing Rate Unchanged at 8% 29/07/2025 – NBG Replenishes International Reserves as IMF Praises Georgia’s ‘Resilience’