Page 33 - GEORptAug18

State-owned IBA, the largest lender in Azerbaijan, has been plagued by problems ever since March 2015, when a sudden depreciation of the Azerbaijani manat pushed the bank on the brink of default. The government rescued the lender and proceeded to increase its stake in it from 51% to over 80% over the years, by injecting capital and taking over AZN14.7bn ($7.3bn) worth of non-performing loans.
The bank defaulted on $3.3bn worth of foreign obligations in May 2017, prompting a debt restructuring process that saw its obligations swapped for dollar bonds issued by IBA and the government. The APA news agency reported in March, citing an annual report from the cabinet of ministers, that the Azerbaijani government had finished taking over $2.2bn worth of external debt owned by IBA.
8.2 Central Bank policy rate
Georgia’s central bank reduces policy rate
The National Bank Of Georgia (NBG) reduced its policy rate by 25 basis points to 7.0% on July 25, the bank said in a statement . The NBG noted that the reduction of the policy rate will continue but at a slower pace than previously envisaged as inflationary pressures have eased.
The inflation rate remained close to the target level of 3%, amounting to 2.2% in June. As a result of the rapid strengthening of the nominal effective exchange rate, inflationary pressure is reduced, the NBG said.
Meanwhile, economic activity increased significantly in the first half of 2018, with real growth reaching 6.1% in January-June according to preliminary data. This is higher than forecast, as a background of strong foreign demand was combined with an increase in money transfers and loans that promoted internal demand. As a result, the NBG has increased its economic growth forecast for 2018 to 5.5%, it said.
The NBG’s Monetary Policy Committee will hold its next meeting on September 5.
33 GEORGIA Country Report August 2018 www.intellinews.com