The Monetary Policy Committee (MPC) of the National Bank of Georgia (NBG) met on January 21, 2009 and decided to maintain its main policy rate (the refinancing rate) unchanged at 8%.

The annual rate of inflation in December has decreased to 5.5 percent. As a result the average annual inflation for 2008 stands at 10 percent. The existing risks to inflation have not changed noticeably since the Committee's last meeting. During the first half of 2009 slowdown in inflation is likely to continue.

The annual growth rate of the M3 monetary aggregate has risen slightly since the Committee's last meeting. In addition, bank deposits have increased as well, although growth in lending to the economy has not been observed. According to the survey on foreign investment conducted by the National Bank of Georgia, a certain recovery of foreign inflows is expected in the second half of 2009, which should bolster lending in the country.

The outlook for global economic growth remains pessimistic. Uncertainty regarding the price dynamics in international financial and commodity markets persists.

The NBG will closely monitor current developments in the economy and financial markets with the objective of achieving the inflation target and will in due course act accordingly.

The next meeting of the Monetary Policy Committee of the NBG will take place on February 18, 2009.