TBC CEO Advocates for Refinancing Rate Reduction in Georgia
Vakhtang Butskhrikidze, the Director General of TBC Bank, recently spoke about the importance of reducing the refinancing rate in the country. He emphasized that reducing the rate will significantly lower interest costs for the majority of Georgian citizens and businesses that have taken loans in GEL. According to Butskhrikidze, the issue can be resolved quickly if the president of the National Bank is elected soon.
The National Bank's decision on March 29 to maintain the current refinancing rate at 11% was met with criticism by some members of the business community. The Bank's Monetary Policy Committee stated that although inflation is decreasing, it is still premature to reduce the refinancing rate. The committee expects inflation to continue decreasing in the second half of the year and eventually reach the target 3% indicator.
However, Butskhrikidze believes that the National Bank can take a more proactive approach to reduce the refinancing rate, such as cutting it month by month instead of waiting for annual inflation to reach 3%. He also stated that the reduction of the rate depends on inflation and urged the Bank to consider the impact of high interest costs on Georgian citizens and businesses.
The refinancing rate has a significant impact on loan interest rates, which can affect the overall economic growth of the country. If the refinancing rate is reduced, it can encourage more borrowing, investments, and economic activity. As such, the debate on refinancing rate reduction is ongoing in Georgia, and stakeholders will continue to closely monitor the National Bank's decisions.