Page 26 - GEORptNov20

Remittances to Georgia H1, 2020 [$ thous]
inflows
outflows
net
% of total
net y/y
TOTAL
768,986
106,054
662,931
100%
-4.9%
Russia
145,699
35,051
110,648
17%
-31.5%
Italy
127,775
1,779
125,996
19%
14.5%
U.S.
88,046
1,810
86,236
13%
3.3%
Greece
96,395
4,270
92,125
14%
3.5%
Israel
71,435
1,665
69,769
11%
-9.1%
Turkey
46,269
17,886
28,384
4%
-11.3%
Germany
29,089
1,735
27,354
4%
31.7%
Ukraine
23,516
11,205
12,310
2%
173.3%
Azerbaijan
16,855
7,136
9,719
1%
178.9%
Spain
19,641
1,137
18,503
3%
-14.0%
5.1.4​ Gross international reserves
Georgia cuts minimum reserves ratio to defend currency
Georgia’s central bank on October 1 cut the required reserve ratio for liabilities denominated in foreign currency, with a maturity of under two years, from 30% to 25%. ​The move followed the hiking, in two 50bp steps, of the refinancing rate to 7.5% during September and the sale by the national lender of another $40mn on the forex market in the month.
The declared purpose of cutting the required reserve ratio was releasing some $700mn to banks and thus preventing a further weakening of the local currency, the Georgian lari (GEL). The downside is that the move again encourages currency substitution, which has been targeted by the central bank over recent years. Also, the forex reserves held by the central bank decrease.
But central bank president Koba Gvenetadze gave an assurance that the monetary authority will only replenish the reserves when circumstances make it possible.
Gross international reserves in Georgia amounted to USD3,616.03mn as of June 2020, up from USD3,399.52mn in March, ​according to the National Bank of Georgia. Of which, foreign currency reserves made up the majority at
26​ GEORGIA Country Report ​November 2020 ​ ​www.intellinews.com