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Georgia central bank hikes key rate amid elevated inflation

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Georgia central bank hikes key rate amid elevated inflation

Georgia's central bank delivered its fourth rate hike this year, saying it will not hesitate to tighten policy further in order to curb inflation.

In a Dec. 11 decision, the National Bank of Georgia raised the refinancing rate by 50 basis points to 9.0%.

Annual inflation rose to 7.0% in November from 6.9% in October, further overshooting the central bank's 3% target. This acceleration was attributed to a depreciation in the Georgian lari's nominal exchange rate

Policy tightening "would continue until the pressure from exchange rate is receded" in order to maintain inflation close to the target level in the medium term, the central bank said.

Policymakers expect inflation levels to start declining from March 2020 and approach the target by the end of that year.