Beso Namchavadze, Chief Economist at Transparency International Georgia, believes that ongoing concerns about the independence of the National Bank of Georgia (NBG) are the key reason the International Monetary Fund (IMF) has recommended restricting discretionary financial transfers from the NBG to the government.
Namchavadze made this assessment during an appearance on the BMGTV, where he commented on the IMF’s recent policy stance regarding Georgia’s central bank operations.
The restriction targets Article 22, Paragraph 3 of the Law on the National Bank of Georgia, which currently allows the NBG’s Board to independently allocate funds from its reserve fund to promote financial stability, transparency, and sustainable economic growth. Under the current law, such decisions can be made at the NBG’s discretion.
“Unfortunately, the IMF did not provide detailed justification for the new recommendation, but it likely identified a legal loophole that could be exploited by the government and the central bank,” Namchavadze explained. “Much like how since 2005 the government has been prohibited from taking on state debt from the NBG, this recommendation aims to eliminate a similar risk, the potential for the NBG to provide direct financial transfers to the state budget.”
Although the National Bank of Georgia maintains that it has not made any such transfers, the IMF appears to be taking a precautionary approach.
“The core issue here is the reputation and credibility of the National Bank,” Namchavadze noted. “The IMF has ongoing concerns about whether the NBG acts independently of government influence. If there were no such risks, if the NBG’s independence were beyond doubt, there likely would have been no need for this recommendation in the IMF’s updated review.”
The IMF’s stance signals a broader institutional concern: that legal discretion, even if unused, can present a risk to monetary policy credibility and macroeconomic stability.
Namchavadze concluded that the recommendation aims to institutionally safeguard the NBG from any political pressure and ensure that its actions remain strictly within the bounds of central bank independence, a foundational principle in modern monetary systems.
