The Monetary Policy Committee (MPC) of the National Bank of Georgia (NBG) met on August 18, 2010 and decided to keep its Main Policy Rate (the refinancing rate) unchanged at 6.5 percent.

The annual inflation rate stood at 7 percent in July. The abovementioned indicator is largely a result of base effect influences. Existing forecasts indicate that the elevated level of inflation in July is a temporary event and it is expected that, during the coming months the annual inflation rate will return to its target level.

Foreign currency inflows arising from remittances have increased over the last few months. As was expected, receipts resulting from the export of tourism services increased considerably in July-August.

A notable increase in the international price of wheat has been observed as of late, although over the last week, the price of wheat has stopped rising. From the beginning of July onward, the price of sugar on the world markets has also been marked by growth, although during the last couple of days, the price of sugar has stabilized as well.

The NBG will closely monitor developments in the economy and financial markets and will in due course act accordingly.

The next meeting of the Monetary Policy Committee will take place on September 15, 2010.