National Bank’s President: Retail Loans Dollarization Coefficient Accounts for 58%
In his interview for Business Partner’s Four TV program of Georgian Public Broadcaster, Koba Gvenetadze, president of the National Bank of Georgia (NBG), analyzed the Larization program outcomes.
At the end of 2016, there were 176,000 retail borrowers of foreign currency-denominated loans, while today, the figure has dropped to 76,000, down 100,000 borrowers, Koba Gvenetadze said. As for October 1, 2020, retail loans dollarization coefficient accounts for 58%, while the figure marked 74% at the end of 2016, he said.
“This signifies that despite the devaluating GEL exchange rate, those 100,000 citizens have not lost 20% of incomes. The GEL exchange rate was not burdened additionally, because, if they had USD-denominated loans, they would demand more USD. They have maintained incomes and this signifies they will assist our economy themselves. Low dollarization ensures inter-assistance between citizens and economy”, Koba Gvenetadze said. If not pandemic, we would have much better indicators, because GEL depreciation amid the shocks grows dollarization scales, but as a result of proper measures, dollarization declines, even more so business, society, and foreign investors make sure the government carries out a proper policy, Koba Gvenetadze noted.
“Unlike inflation, we have not determined a target in the part of Dollarization, because De-dollarization is a long-term process, maybe, it will last 10-12 years and this process must not be accelerated. We should provide a business-friendly process”, Koba Gvenetadze said.