The National Bank of Georgia (NBG) purchased a net $3.37 billion in foreign currency between January and September 2026, with September purchases alone reaching $248.5 million. The country’s international reserves stood at $8.17 billion at the end of September.

The central bank says it buys foreign currency when market conditions allow, with the aim of increasing the country’s international reserves.

According to NBG data, foreign currency purchases accelerated from April, peaking in May at $632.9 million and reaching $612.6 million in June. The only month in which the bank recorded net sales was March, when it sold $16.2 million.

Monthly net purchases through the Bmatch platform were as follows:

  • January: $86.6 million

  • February: $429.3 million

  • March: $16.2 million in net sales

  • April: $333.3 million

  • May: $632.9 million

  • June: $612.6 million

  • July: $488.2 million

  • August: $555.6 million

  • September: $248.5 million

However, the central bank’s large-scale dollar purchases have also required measures to absorb excess lari liquidity from the banking system. When the NBG buys dollars, it injects lari into the market, potentially adding to inflationary pressure.

To offset this effect, the central bank has withdrawn approximately GEL 1.7 billion from the financial system this year through monetary sterilisation.

Among the measures taken, the NBG reduced the volume of one-week refinancing loans to commercial banks from around GEL 4 billion to GEL 250 million and eliminated one-month refinancing loans entirely.

It also sold more than GEL 1 billion worth of government securities on the secondary market, transferring funds from commercial banks back to the central bank. In addition, the NBG issued deposit certificates, absorbing approximately GEL 570 million in excess liquidity by the end of September.

The central bank pays interest to commercial banks on funds attracted through deposit certificates, while interest on government securities is paid by the Ministry of Finance.

The NBG’s monetary policy has drawn criticism from some economists, particularly as inflation remains above the central bank’s target, while the refinancing rate has remained unchanged.

Economist Giorgi Khishtovani questioned why the central bank has not raised interest rates to address inflation and argued that the lari should have appreciated more significantly given the scale of foreign currency purchases.

"If you have an inflation problem, raise the interest rate. Why isn't the National Bank doing that?" Khishtovani said on the Business Today programme, suggesting that the decision not to raise rates could be politically motivated.

He also argued that a stronger lari would help curb imported inflation, particularly amid rising fuel prices. In his view, the current exchange rate does not fully reflect the scale of the central bank’s foreign currency purchases.

Khishtovani further suggested that higher inflation could benefit the government by increasing nominal tax revenues, while a weaker lari could be advantageous for exporters. These claims represent the economist’s assessment and have not been independently established.

The NBG maintains that it purchases foreign currency when market conditions permit, with the aim of strengthening the country's international reserves.

The central bank is scheduled to publish updated data on its foreign exchange market interventions on November 25, 2026.

Author: Kristina Kvatchantiradze