Koba Gvenetadze: Removing the 200,000 GEL Top Margin May Bring Negative Outcomes
"I do not object that the 200,000 GEL top margin run on loans", Koba Gvenetadze, president of the National Bank of Georgia (NBG) told the Business Partner’s Four TV Program. This regulation was not introduced by the NBG, because the NBG is not authorized to initiative legislative bills, Gvenetadze specified.
This top margin was set as part of the government-proposed legislative amendments, however, the NBG does not object to these amendments, Gvenetadze noted.
“I do not object to this 200,000 GEL top margin, because when situation worsens and the USD-denominated loan generate problems, an easier regime may bring more negative outcomes”, Koba Gvenetadze noted.
He also responded to the initiatives for narrowing the foreign currency reserves and noted that “We should choose whether better an egg today than a hen tomorrow”.
“If we choose the first case, we can do this in the short-term period, however, this decision will bring more problems. A 100 USD loan issued today will require 105-106 USD tomorrow, that is, the burden on currency demand will rise further; And if we want to have better tomorrow, we should follow another variant”, Koba Gvenetadze said.