Monetary Policy Instruments

    Short-term money market interest rates serve as an operational target for the Monetary Policy Committee of the National Bank of Georgia. By steering short-term money market rates, monetary policy influences market interest rates, and ultimately over the general price level. To attain its operational target, the NBG uses a framework which contains a set of instruments and procedures through which monetary policy decisions are implemented in the economy. The operational framework defines the procedures of how to achieve the desired money market rates with existing instruments such as refinancing loans, one-month open market operation, open market operations with certificates of deposit and treasury securities, overnight loans and overnight deposits, minimum reserve requirements and other instruments. 



    The rates of the monetary policy instruments

     

     

    In force from August 5, 2021   Maturity Rate (%)
    Refinancing loan 7 days  To be defined by auction (minimum 10.00% )
    One month open market operation 28 days To be defined by auction (minimum 10.00% )
    Overnight deposits 1 day    (10.00-1.75) %
    Overnight loans 1 day  (10.00+0.75) %
    Certificates of deposit 3 months Defined by auction
    Treasury securities 1/2/5/10 years Defined by auction

     

     

      Liabilities in National Currency Liabilities in Foreign Currency
    Reserve requirements* 5.0% 10%-25%

     

    * Liabilities in national currency with the remaining maturity over 1 year and liabilities in foreign currency over 2 years are exempt from reserve requirements. For funds in foreign currency with remaining maturity 1-2 years, reserve requirement amounts to 10%-15%.