ISET

Central banks are often surrounded by an aura of mystique and the common man on the street seems to have very little understanding not only of what, why, and how exactly a central bank does, but most importantly of how much a central bank actually can do. It is commonly believed that the job of a central bank is to print money, which sounds rather trivial. Yet, at the same time, it is often believed that a central bank can effortlessly push an economy in different directions, and that it controls various powerful economic variables – interest rates, exchange rates, inflation, unemployment, and growth – that affect our everyday lives.

Significant changes are envisioned for the National Bank of Georgia as the new government and the parliament take office. The latest proposal put forward by the Georgian government is to move towards an inflation targeting regime, a framework practiced by several central banks around the world (New Zealand, Canada, Euro area, U.K., Sweden, Australia, Iceland) and also being currently put in place in several transitional and developing countries.

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