Natia Turnava: We Continue the Consistent Policy of Larization to Safeguard Financial Stability

“In order to reduce the risk of fluctuations in the foreign exchange market, we continue the consistent policy of larization,” said Natia Turnava, President of the National Bank of Georgia, during a joint briefing marking the conclusion of the IMF mission in Georgia. The briefing was also attended by Minister of Finance Lasha Khutsishvili and IMF Mission Chief Alejandro Hajdenberg.

According to Turnava, the Georgian banking sector remains robust: “The banking sector is well-capitalized, with good asset quality and sufficient buffers. This gives us confidence that, even under conditions of heightened international uncertainty, our financial system will continue to withstand various risks, as it has done successfully thus far.”

She highlighted the IMF’s recognition of the National Bank’s efforts to promote larization, noting it as a key pillar of financial stability policy.

“In order to continue maintaining financial stability, our policy must aim to mitigate and neutralize a range of risks. One such risk is posed by unsecured, or unhedged, loans. To reduce the effects of currency fluctuations on the population and financial markets, we are steadfastly continuing our larization policy,” she said.

Turnava added that the Financial Stability Committee recently took further action in this regard: “We increased the maximum threshold for unhedged loans to 750,000 GEL for individuals whose income is primarily in the national currency. This step helps reduce a significant risk and contributes to sustaining financial stability.”