Georgia's Foreign Exchange Reserves Reach Historic High of $5.1 Billion
The National Bank of Georgia has actively purchased foreign exchange reserves, leading to a historical maximum of $5.1 billion in reserves. The NBG alone withdrew $460 million from the market in the first quarter of the year, prompting the National Bank to purchase reserves in response.
According to National Bank Vice President Archil Mestvirishvili, the bank purchased reserves because market conditions provided the opportunity for interventions. Adequate reserves are vital for macroeconomic stability, and the current level of reserves is considered adequate to ensure long-term stability of the exchange rate.
Last year, Georgia's current account deficit was reduced to a historic minimum due to factors such as remittances transferred by migrants, tourism recovery, and increased exports. Although imports also increased, the increase in income exceeded the outflows.
The National Bank's purchase of foreign exchange reserves is a significant step towards ensuring long-term stability of the exchange rate, which is essential for maintaining macroeconomic stability in the country. The bank's active management of reserves has led to an increase of $1.3 billion in foreign exchange reserves over the course of a year.