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Georgia’s TBC Bank borrows $100mn from EBRD
The European Bank for Reconstruction and Development (EBRD) has approved a $100mn senior unsecured loan for Georgia’s TBC Bank as part of its support in the country’s fight against the coronavirus outbreak, the EBRD said on June 23.
“The proceeds will be used for on-lending to eligible sub-borrowers, preferably small and medium-sized enterprises,” EBRD said in a press release.
The loan will be provided this year in two equal tranches.
The EBRD added that the loan would help to “ensure the resilience of the financial sector and to preserve competition in the sector and continued lending to the economy adversely impacted by the COVID-19 outbreak.”
TBC in mid-March allowed all its debtors to suspend repayment of bank loans for a period of three months and, like all other Georgian banks, built up provisions (4% of total assets) for the expected deterioration of its loan portfolio amid impacts of the pandemic.
8.2 Central Bank policy rate
Gerogia’s central bank keeps refinancing rate hawkish at 8%
The National Bank of Georgia (NBG) on October 28 kept its key refinancing rate at 8%. The central bank maintained the rate at the same level for a second straight time after reducing it to 8% on August 5. The monetary board convenes again on December 9.
NBG’s tight monetary policy, justified by adverse expectations on the foreign exchange market, pushes up the government’s financing costs. On October 27, GEL80mn ($24mn) of 5-year government bonds were issued with a weighted average yield of 8.29%.
The price dynamics in recent months were in line with forecasts, central bank said, with inflation continuing to decline, reaching 3.8% in September.
The central bank also stated that inflation, driven downward by weak aggregate demand, will adhere to a declining trend and remain close to the target level in 2021.
The regulator also said that it expected domestic demand to be the key driver of economic growth in 2021, taking into account significantly reduced external demand, with revenues from international tourists declining by 95% in September annually.
42 GEORGIA Country Report November 2020 www.intellinews.com
