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and higher foreign exchange reserves at the central bank, the National Bank of Georgia (NBG). At the same time, the agency expects the public finances to remain controlled.
S&P said it believed that Georgia's economy would continue to grow at the comparatively high pace of 4% annually over the medium term. As in the past, it expected this rate to be higher than those of other countries in its region.
In the view of the rating agency, the floating exchange rate regime that Georgian authorities have maintained for many years remains particularly important. Against a weaker external environment, the exchange rate has in the past adjusted promptly, helping to avoid any abrupt one-off swings. Among other things, this has preserved the stability of the financial system a nd allowed Georgia to avoid the credit crunch that hit some other countries in its region in recent years, aggravating other economic problems.
Meanwhile, Fitch Ratings upgraded Georgia’s long-term foreign currency rating to BB from BB- with a stable outlook in February.
8.4.1 Company specific ratings
Fitch cuts Georgian Leasing’s outlook to Stable from Positive
Fitch Ratings has revised its outlook for Georgian Leasing Company, wholly-owned by Bank of Georgia (BoG), to Stable from Positive, while affirming its Long-Term Issuer Default Rating (IDR) at B+.
The action reflected a similar action on the leasing company’s parent, BoG—after it increased its stock of loans at a fast pace while also relying to a large extent on foreign currency lending.
Fitch said that Georgian Leasing Company's IDRs and Support Rating were driven by support from BoG(BB-/Stable). Its view of the probability of support being forthcoming was based on full ownership, close integration and a record of capital and funding support.
Fitch also noted that a significant and sustained improvement of the company's performance and prospects, and a greater strategic alignment within the parent group would, in its view, increase BoG's propensity to support the company and could drive the equalisation of the ratings with the parent.
Fitch reported that a material weakening of BoG's propensity or ability to support the company might result in a wider differential in the awarded rating notches from the parent.
On April 16, Fitch affirmed the Long-Term IDRs of TBC Bank Group (TBC) and Bank of Georgia (BoG) at BB- and revised their Outlooks to Stable from Positive. The revision of the Outlooks on TBC and BoG to Stable from Positive reflected the rating agency’s view of still significant risks associated with continued rapid loan growth and sizable foreign currency (FC) lending.
37 GEORGIA Country Report July 2019 www.intellinews.com