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Georgia’s Banking Sector Looks to 2016 with Optimism

The Fitch rating for the Georgian bank sector is “Stable”. This signifies considerable reserves of commercial banks will compensate the quality of assets affected by the GEL depreciation.

The 36% devaluation was the main challenge in 2015. The bank sector has showed steadiness amid the GEL depreciation, GDP growth slowdown and a demand contraction in exports markets. The Georgian bank sector has maintained positive indicators.

According to the International Monetary Fund (IMF), the conservative approaches in the supervision part has maintained the positive indicators. According to the Financial Sector Assessment Program (FSAP), the Georgian practice is recognized as the most advanced one.

The risk-oriented supervision frameworks enabled to identify risks in the early phase (all potential bank risks are assessed). Loan interest rates have considerably decreased. They have halved for the last 5 years.

Giorgi Kadagidze President of National Bank of Georgia evaluates the current year and expects 2016 to be successful.

„The solution consists in strong institutions, where officials full of responsibility take decisions to the benefit of the country and citizens. I am proud a team of professionals works at the NBG that, under the constitutional obligations, ensures financial and macroeconomic stability. And the NBG successfully fulfills these obligations,” said Kadagidze.

 “We have maintained the mandatory level of currency reserves. The NBG is to maintain the adequate international currency reserve to guarantee the stability of our country”.

“In 2015  the NBG introduced new banknotes of GEL, for the first time since 1995. The new banknotes will appear in the turnover stage by stage starting 2016,”he added.

“The year of 2015 was important as the Georgian national currency celebrated its 20th anniversary. In this period the GEL has withstood many challenges, deserved confidence. The Georgian national currency will be withdrawn, when Georgia will refuse to carry out its own currency policy, the day Georgia will join the EuroZone. This is a final stage in the Euro Integration process that was approved by the will of our population”.