Page 32 - GEORptSep20

Georgia’s central bank, EBRD open swap line for mutual support
Since March 13, when NBG stepped in for the first time in this sales phase to support the local currency, with a $20mn sale, the national lender has sold nearly $190mn.
As a result of the latest auction, the GEL strengthened by 2.55 tetri against the dollar to GEL 3.0393 on the day.
The NBG has been carrying out currency interventions in response to the economic shock caused by the coronavirus (COVID-19) pandemic and the slump in oil prices.
Six interventions have been made in the foreign exchange market in all. Of those, four were $40mn sales.
As for the total amount of FX reserves at the central bank, they have been growing with the help of international donors. On April 31, the volume of reserves amounted to $3.47bn, namely $77mn more than at the end of the previous month.
The European Bank for Reconstruction and Development (EBRD) and Georgia’s central bank (National Bank of Georgia, or NBG) have set up a US dollar-Georgian lari (GEL) foreign exchange (FX) swap facility, enabling the former to secure reliable access to GEL liquidity and continue lending in local currency to companies that are experiencing temporary difficulties.
The parties executed the first transaction on 24 April.
The foreign exchange swap line will support the management of NBG’s FX reserves with additional USD liquidity, which the central bank can draw on when need be.
The NBG made its latest intervention on the foreign exchange market on April 27 by selling $20mn to smooth exchange rate volatility.
The EBRD has expanded its response and recovery programme addressing the coronavirus (COVID-19) crisis and it expects the entirety of its investments of up to €21bn in the two years ahead to be dedicated to this effort. The package includes a €4bn Resilience Framework for existing clients, offering liquidity support, short-term working capital and trade finance. The EBRD emphasised that it was also ready to deploy its capacity to provide local currency lending.
32​ GEORGIA Country Report ​September 2020 ​ ​www.intellinews.com