At an International Monetary Fund Governor Talks session, National Bank of Georgia Governor Natia Turnava outlined the central bank’s proactive and cautious approach to anchoring inflation expectations amid repeated external shocks. She cited the 0.25 percentage point policy rate increase in May 2026 as a pre-emptive response to the Middle East conflict and higher fuel prices, intended to limit second-round effects and send a clear signal to financial markets. Headline inflation has risen to 5.6%, above the 3% target, but core inflation of 3.5% and services inflation of 3.7% remain close to target. Turnava said this indicates that expectations remain anchored, after average inflation of 2.5% in 2023-2025. She also linked strong economic growth to high-productivity industries that do not generate substantial domestic demand pressures. Turnava emphasized that central bank independence depends on timely, credible decisions as well as legal safeguards. She also identified macroeconomic stability and confidence in the national currency as central to dedollarization, noting that the dollarization of deposits and loans has declined by about 25-30 percentage points over the past decade.
National Bank of Georgia Governor outlines proactive monetary stance as headline inflation reaches 5.6%
National Bank of Georgia Governor Natia Turnava outlined a proactive monetary policy stance as headline inflation reached 5.6%, citing the May 2026 rate increase as a measure to anchor expectations and contain second-round effects. Core inflation of 3.5% and services inflation of 3.7% remain close to the 3% target. Deposit and loan dollarization has fallen by about 25-30 percentage points over the past decade.