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UPDATE 1-Georgia's keeps key refinancing rate unchanged at 6.5 pct
December 14, 2016 / 12:21 PM / a year ago

UPDATE 1-Georgia's keeps key refinancing rate unchanged at 6.5 pct

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TBILISI, Dec 14 (Reuters) - Georgia’s central bank kept its key refinancing rate unchanged at 6.5 percent on Wednesday after a series of cuts, as the country struggles with falling exports and an expanding current account deficit.

The bank said the decision had been based on macroeconomic forecasts and the fact that the “factors influencing on inflation from demand are weak”.

Inflation in the South Caucasus nation stood at 0.2 percent year-on-year in November, down from 6.3 percent the same month a year ago, and well within the 5 percent limit set by the government for 2016.

External shocks and a planned rise in excise tax in 2017 would boost consumer prices, though not for long, the central bank added.

The bank’s monetary policy committee, which cut rates in April, June, July, September and October this year, will hold its next meeting on Jan. 25, 2017.

Growth has been slowing in the former Soviet republic, hit by a plunge in the Russian rouble and a drop in remittances from overseas.

Exports fell 5 percent year-on-year to $1.920 billion in the January-November period, while the current account deficit expanded by 44 percent to $6.991 billion.

The lari’s official rate hit an all-time low of 2.6599 to the dollar on Wednesday, down from 2.6154 on Tuesday. (Reporting by Margarita Antidze; editing by Maria Kiselyova)

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