National Bank of Georgia (NBG) said on July 21, that it had increased its benchmark rate by 25 basis points to 6.5%.

In June the central bank increased refinancing rate to 6.25%, which was kept unchanged at 5% since late November, 2009.

“It is expected that in the medium term inflation should stay within the 6% range, although minor upward risks do exist,” NBG said in a statement after a meeting of the bank’s monetary policy committee on July 21.

“Taking into consideration the existing signs of economic recovery during the first half of the year, the forecasted GDP growth rate for 2010 stands at 4.6%,” it said.

NBG also said that despite “the small decrease”, annual growth rate of broad money (M3) indicator still remains high. Annual growth in broad money indicator was over 40% in June.

Prospects for foreign direct investment still remain unclear, it said.