National Bank of Georgia (NBG) reduced its key interest rate from 11 to 10% citing increased business risks and liquidity crunch, the NBG’s monetary policy committee said in a statement after an extraordinary meeting on September 10.

The central bank reduced the rate from 12 to 11% on August 20.

The committee said in the statement that bank activity has slowed down “significantly due to increased business risks and the ongoing liquidity deficit.”  

“It is expected that the existing environment will cause banks to manage their risks conservatively in the medium term, reducing the banks’ ability to expand their operations aggressively,” the statement reads.