The National Bank of Georgia (NBG) has reduced minimum reserve requirements on foreign currency deposits by 5 percentage points, a change that will take effect from May 19. The decision is expected to release around $250 million in liquidity for commercial banks, which can be redirected into lending activity.
According to Davit Utiashvili, Head of the NBG Financial Stability Department, the move reverses a temporary tightening introduced at the end of 2024. At that time, the regulator raised reserve requirements to curb excess foreign currency liquidity and limit potential risks from rapid FX lending.
The NBG now argues that those risks have eased, with market conditions stabilizing and excess liquidity no longer a concern. The central bank also noted that its ongoing FX interventions and existing lending limits (including the GEL 1 million threshold on FX loans) help manage dollarization risks without stricter reserve rules.
Following the change, the average reserve requirement will fall from 16.5% to 11.5%, based on a deposit dollarization rate of about 53%. The NBG expects the adjustment to support credit growth, particularly for SMEs, by improving access to foreign currency financing.
