Page 43 - GEORptSep20

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 cuts refinancing rate in another cautious 25bp step
The monetary board of the National Bank of Georgia (NBG) decided to cut the refinancing rate by 0.25pp to 8.0%.
The board said that it “continues a gradual exit from the tightened policy stance at a slower pace, reducing the rate by 0.25pp.”
The revision of the economic growth forecast followed a larger than expected decline in global economic activity and external demand than was evident in the early stages of the pandemic, NBG said.
At the same time, the risks of inflation expectations should also be taken into account as inflation rate remained above the target.
As expected, inflation continued to decline in July, reaching 5.7% , while prices fell by 0.5% on a monthly basis.
According to the NBG forecasts, other things being equal, inflation will continue to decline over the rest of the year, fall below the target level in the first half of 2021 and then approach it from below.
NBG also stated that its revised forecast expects Georgia’s COVID-hit economy to shrink by 5% this year, exerting downward pressure on inflation.
43​ GEORGIA Country Report ​September 2020 ​ ​www.intellinews.com