National Bank Head Says De-Dolarization Brings Positive Results

The Head of the National Bank of Georgia (NBG), Koba Gvenetadze, said that the government’s 10-point program, aimed to reverse the dollarization trend, has started to bring positive results.

Gvenetadze told the International Monetary Fund (IMF), that after the shock of 2015–2016, a need to deal more proactively with high dollarization in Georgia was obvious. He added that it represents a high risk for the most vulnerable groups because the fluctuations of the dollar against the national currency lari immediately affect their finances.

“Following discussions with the IMF, we put together a 10-point program to reverse this dollarization trend. This long-term project already has some early results; for instance, loan dollarization decreased by 9 percentage points, to 56 percent of total loans in 2017. The drop in household dollarization was even larger, at 12 percentage points. Deposit dollarization has also been declining,” the IMF quoted Gvenetadze.

The NBG Head noted that the banking system is now resilient and highly transparent.

“Banks have enhanced their disclosure standards, which means it is clear in what financial condition they are, who their owners are, and if they have hidden costs,” he added.

Gvenetadze said that Georgian banks are privately owned, with 85 percent of foreign ownership.

“The two largest banks of the Georgian banking system are listed at the premium segment of the London Stock Exchange, which sets very high standards for accountability and transparency,” he said.

By Thea Morrison