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The Larization of Deposits Decreased to 38.4%

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BM.GE
27.10.20 14:15
620
In light of the recent depreciation of the GEL, the larization of deposits in Georgia's commercial banks has decreased. According to the National Bank, as of October 1, 2020, 38.41% of bank deposits in GEL were denominated, which is 2.08 percentage points lower than on September 1. Excluding the exchange rate depreciation effect, the larization decrease was 0.49%.

In total, the volume of deposits in the country's banking system amounted to GEL 32.84 billion as of October 1, which is GEL 1.91 billion, or 6.19% more than on September 1 (1.96% more without the exchange rate effect). In September, compared to the previous month, there was an increase in time deposits by 821.96 million GEL, or 5.66% (increased by 1.42% without the effect of the exchange rate), while demand deposits increased by 1.09 billion GEL, or 6.66% (increased without the effect of the exchange rate By 2.45%).

The larization rate of deposits has increased on an annual basis. In October 2019, 63% of bank deposits (which then amounted to GEL 25.6 billion) were denominated in foreign currency. The share of dollarization increased, especially in March-April 2020, and reached 65% of the sector. In parallel with the relative stabilization of the exchange rate, the share of dollarization also decreased, and it stood at 59.5% in August, while as a result of the re-depreciation, it increased again.

The reduction of the dollarization share in the last few months has also been helped by the government's transfer of budget balance to commercial banks. In this way, the Ministry of Finance transferred 1.6 billion GEL to commercial banks.