The Monetary Policy Committee (MPC) of the National Bank of Georgia (NBG) met on November 24, 2010 and decided to keep its Main Policy Rate (the refinancing rate) unchanged at 7.5 percent.

Annual inflation reached 9.6 percent in October. The share of food products in total CPI was around 8 percentage points. The increase food prices are caused by exogenous, one-time factors, which may affect inflation expectations. Other inflation risks haven't changed since the previous meeting of the Monetary Policy Committee.

In the recent months the National Bank has tightened the monetary policy, which was mainly reflected in the increase of the policy rate. The change in the policy rate affects the market interest rates with a lag. At present, the increase in the policy rate hasn't been fully transmitted to the market rates yet.

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 December 22, 2010.