Archil Mestvirishvili, Vice-Governor of the National Bank of Georgia (NBG) believes that the policy of larization, which the National Bank has been implementing with various measures for about 10 years, cannot be considered artificial.
According to him, the high dollarization of loans represents an important challenge for the economy as a whole, in response to which the National Bank is taking planned steps. In addition, according to Mestvirishvili, the NBG's measures are milder compared to similar policies of other countries in the region.
"We cannot call it artificial larization. We have the softest larization policy, even if you compare it with neighboring countries. High dollarization is one of the problems that leads to high interest rate, including the interest rate of GEL, also restricts economic growth and because of high dollarization hinders long-term investments, including hinders the rating, if you see the report of any rating company, high dollarization is mentioned as a problem. It can be said that it is the highest structural problem of the country and it must be addressed if we want stable, long-term growth," said Archil Mestvirishvili.
As of May 2022, 49% of the 43-billion credit portfolio in the Georgian banking system is denominated in foreign currency. For the first time in the last 30 years, dollarization of the credit portfolio fell below 50% in April of this year. For comparison, in 2015, dollarization of loans was 65%. During the past years, the decrease of dollarization was caused by the regulations adopted by the National Bank, as well as by the ban of foreign currency loans up to GEL 200,000 by the Parliament.
