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Georgia's central bank keeps policy rate unchanged

The National Bank of Georgia's monetary policy committee left its refinancing rate unchanged at 7.25% amid falling inflation and faster-than-expected economic growth.

In line with its forecasts, the central bank said inflation has been declining toward its target level of 3%, standing at 2.5% in May.

Inflation is expected to be around the target throughout 2018, the bank said, although the risks of inflationary pressures have increased due to recent volatility in international financial markets.

"Consequently, the Committee again deemed it appropriate to maintain the moderately tight monetary policy at this stage," the bank said. "The gradual easing of the policy will be considered once the factors pushing inflation upwards are sufficiently weakened."

Exceeding earlier projections, the Georgian economy grew 6.5% annually in April and 5.5% in the first four months of 2018, according to the central bank, citing preliminary estimates.

The central bank's monetary policy committee also lowered the minimum reserve requirements on local currency funding to 5% from 7% to encourage the attraction of funds to the Georgian lari.