National Bank of Georgia (NBG) increased refinancing rate from 6.5% to 7% on September 15 in an attempt to curb inflation.

According to the statistic office, Geostat, Georgia’s year-to-year inflation hit a 24-month high of 9.5% by the end of August.

NBG’s monetary policy committee said after its meeting on September 15, that “high inflation” was caused by external factors, mainly attributed to price hikes on global commodity market, “for which monetary policy has limited influence.”

“Dynamics of core inflation indicates an increase of inflation expectations, therefore tightening of monetary policy is needed,” the central bank said in a statement.

NBG kept its benchmark rate unchanged at 6.5% last month. The rate was kept unchanged at 5% since late November 2009 and increased to 6.25% in June and then to 6.5% in July.