Minimum reserve requirements for funds in a foreign currency  reduced

Minimum reserve requirements for funds in a foreign currency reduced

access_time2019-10-16 14:32:06

Starting  October 17, the National Bank’s decision to reduce the minimum reserve  requirements set for loans in foreign currency from 30% to 25% enters into force.

According to the regulator, this will allow commercial banks to increase lending in foreign currency by $ 700 million and reduce interest rates on the loans.

 The decision was caused by the lari’s devaluation and its impact on the inflation rate.

 “The recent devaluation of the national currency has had a negative impact on inflation. Given  that the central bank’s  main function is to control inflation, the regulator though  it  necessary to take a number of measures, ” President  of the National Bank of Georgia  Koba Gvenetadze says.


He speaks about the currency interventions in the market which contained  the lari’s depreciation and reduced inflationary pressures.

 The next step  was to reduce the minimum reserve  requirements for loans in foreign currency.

“This will make  loans in foreign currency more accessible and will  meet the demand.  This step will boost  the national currency’s  stabilization and reduce inflation,” NBG President points out.

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