Georgia's policy rate is 8.25%. Armenia's and Azerbaijan's are both 6.5%

Because its inflation has been further from target. The National Bank's July statement reports headline inflation at 5.8% in June 2026, against a 3% target, driven mainly by energy prices, with core inflation at 3.2% and services inflation up to 4.1% — the last of those being the number that keeps policymakers cautious, because services inflation is where an energy shock turns into a wage-and-price cycle. The bank projects average inflation of 5.2% in 2026, easing from the second half of the year and returning to target over the medium term. Growth has not been the constraint: 6.4% in May, an average of 7.8% across the first five months, and a 6.5% forecast for the year.

Armenia has been on hold at 6.5% through six consecutive meetings, the most recent on 4 August 2026. Azerbaijan held its discount rate at 6.5% on 31 July 2026 and left the corridor at 5.5% to 7.5%; the bank described two opposing forces — an upward revision to its inflation forecast arguing for tightening, and a large excess of supply over demand in the foreign exchange market arguing for easing — and judged that they offset each other. Three central banks, three different situations, and two of them comfortable enough to stand still for months.

A policy rate is not a lending rate; it is the floor that banks build on, adding funding costs, risk margin and currency premium on top. A point and three-quarters of extra policy rate does not translate one-for-one into your repayments, but it does mean lari lending in Georgia starts from a higher base than dram or manat lending next door, and it is part of why borrowers here still look hard at foreign-currency loans despite the exchange risk. If you are comparing a Georgian purchase with an Armenian or Azerbaijani one on financing cost alone, this is the structural reason behind the quotes you will be given.

The direction, not the level. Georgia's central bank has said it expects gradual normalisation as the external energy shock fades, and its own forecast has inflation easing from the second half of 2026. If that happens, the gap with Armenia and Azerbaijan narrows and lari borrowing gets cheaper; if services inflation keeps climbing instead, the 8.25% is the floor rather than the ceiling. Either way, the rate decisions are published on fixed meeting dates by all three banks, which makes this one of the few things in the region you can diarise rather than guess at.