National Bank of Georgia Raises Rate to 8.25% as Inflation Climbs

TL;DR The National Bank of Georgia lifted its refinancing rate to 8.25% from 8.00%, citing Middle East‑driven supply shocks that pushed inflation to 5.9% while the economy expanded 10.7% year‑on‑year.

Context The Monetary Policy Committee said the rate increase aims to keep inflation expectations anchored at the 3% target. It noted that disruptions to shipping through the Strait of Hormuz have raised global oil prices, feeding fuel costs in Georgia. Despite the shock, the bank described the economy as resilient, with high‑productive sectors offsetting demand‑side pressures.

Key Facts - The refinancing rate rose by 0.25 percentage points to 8.25%, the first change since May 2024. - Annual inflation reached 5.9% in March, above the 3% target. - Real GDP grew 10.7% year‑on‑year in March 2026.

What It Means Bank of Georgia (BGEO.L) shares slipped 0.6% to $28.40, trimming its market cap to about $4.2 billion. The Georgian lari (GEL/USD) weakened 0.3% to 2.65 per dollar as investors priced in tighter money. Ten‑year government bond yields rose five basis points to 6.2%, reflecting higher risk premiums. The move signals the NBG’s willingness to act if supply‑side pressures persist, while maintaining a bias toward gradual normalization once shocks fade.

Watch for the next MPC meeting on June 17, 2026, upcoming inflation prints, and oil price movements tied to Strait of Hormuz traffic.