Weekly Market Watch

NBG kept its key rate unchanged at 8.0%

On 25 March 2026, the NBG kept the monetary policy rate unchanged at 8.0%, as geopolitical tensions in the Middle East and disruptions in the Strait of Hormuz have strained global supply chains, pushing up energy and shipping costs.

Annual headline inflation stood at 4.6% in February 2026 and, as stated by the regulator, was broadly in line with its central scenario, with food price contributions moderating and inflation expectations remaining anchored near the target. However, the regulator assessed that the balance of risks has shifted toward a higher inflation scenario, as rising oil prices are already partially transmitting to the Georgian market. The NBG signaled a clear hawkish bias: should inflationary pressures persist or second-round effects materialize, it stands ready to maintain the current tight stance for longer than expected or tighten it further. The next monetary policy meeting is scheduled for 6 May 2026.

Bank lending increased by 14.2% y/y in Feb-26

In Feb-26, the banking sector loan portfolio growth accelerated, up by 14.2% y/y (+1.3% m/m) excluding FX effect, following a 13.3% y/y rise in previous month. In unadjusted terms, the loan portfolio increased by 13.6% y/y (+0.9% m/m) to GEL 71.1bn (US$ 26.6bn). By segment, loans to legal entities rose by 12.0% y/y (excluding FX effect), while retail loans grew by 15.5% y/y in February. Loan dollarization declined to 42.2% (-0.22ppts m/m and -0.91ppts y/y) in Feb-26.

On the funding side, deposits growth also accelerated, rising by 18.5% y/y (excluding FX effect) to GEL 67.9bn (US$ 25.4bn) in Feb-26, compared to 15.8% y/y in previous month. In terms of currency breakdown, GEL deposits growth picked up sharply to 34.8% y/y (+27.9% y/y in Jan-26), while FX deposits growth (exc. FX effect) moderated to 4.0% y/y (+5.2% y/y in Jan-26). As a result, deposit dollarization reduced significantly to 46.0% (-1.41ppts m/m and -7.15ppts y/y) in Feb-26.

NBG purchased US$ 429.3mn in Feb-26

NBG intervened on FX market and purchased US$ 429.3mn through BMatch platform in Feb-26. Overall, the NBG’s net purchases reached US$ 515.9n in 2M26.