International credit rating agencyStandard & Poor's published the latest review, noting that the Georgian banking system was “developing sustainably” and confidence in the sector was “high”.
According to the NBG, Georgia had maintained its positions in the rating this year with seven points, which it called “one of the highest ratings” compared to the countries of the wider region.
"Despite the unstable environment in the region, Georgia's score remained unchanged, while the position of the banking system has improved in the criterion of economic imbalance, and the assessment has been reduced from high risk to medium risk”, Turnava said.
The NBG said the rating agency cited the stability of the financial sector as a “strength” of the Georgian banking industry, which it said was supported by a macroeconomic environment reflected in the level of capitalisation and liquidity, as well as profitability and low credit losses.
"Compared to other countries of the region, the effectiveness of the monetary policy of Georgia is high. In July 2023, against the background of the strengthening of the national currency and the reduction of prices for commodity products, inflation decreased, as a result of which the National Bank lowered the refinancing rate”, S&P said.
The rating agency also shared inflation forecast for next year, saying it would be 2.4 percent on average and would remain close to the target level in 2024.
At the same time, the S&P emphasised high dollarisation remained the “main challenge” in the banking sector of Georgia. Turnava acknowledged the issue and said her office was “actively working and planning to take further steps in the direction of reducing dollarisation”.
The Georgian central bank also said it had made “significant progress” in reducing dollarisation, which currently stands at 45% in loans.
