After maintaining the refinancing rate at 7.5% for three consecutive months, the NBG raised the rate by 50 basis points, to 8%, on February 16th. The increase in the refinancing rate was in response to the surge in inflation, which picked up from August 2010, but has risen more steeply in year-on-year terms in recent months. Although the NBG insisted that the current high rate of inflation is caused by exogenous rather than domestic factors (most notably a sharp increase in world food prices) and that the growth in the money supply is under control, it decided to increase the rate as a result of fears that the growth in food prices may create high inflation expectations.