Georgia reduces minimum reserve requirements in foreign currency for banks
Baku, Azerbaijan, October 16
By Tamilla Mammadova – Trend:
Georgian National Bank’s decision to reduce the minimum reserve requirements set for loans in foreign currency from 30 percent to 25 percent enters into force starting October 17, Trend reports via the bank.
According to the bank, this will allow commercial banks to increase lending in foreign currency by $700 million and reduce interest rates on the loans.
The decision was caused by the lari’s devaluation and its impact on the inflation rate.
“The recent devaluation of the national currency has had a negative impact on inflation. Given that the central bank’s main function is to control inflation, the bank though it necessary to take a number of measures,” President of the National Bank of Georgia Koba Gvenetadze said
The next step was to reduce the minimum reserve requirements for loans in foreign currency, said the official.
“This will make loans in foreign currency more accessible and will meet the demand. This step will boost the national currency’s stabilization and reduce inflation,” he said.
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