BAKU, Azerbaijan, Sept. 25
By Tamilla Mammadova – Trend:
The rates of dollarization on loans and deposits were increased by 0.3 and 8 percentage points by the end of July of 2020 compared to the corresponding period of 2019, Trend reports via the Policy and Management Consulting Group (PMCG) International development company.
The rates rose to 56.9 percent and 61.3 percent, respectively.
Bank assets, loans, and deposits, expressed as a percentage of GDP, had an overall upward trend since the first quarter of 2017.
Bank assets, expressed as a percentage of GDP, experienced a rise by 3.9 percentage points by the end of the second quarter of 2020, compared to the beginning of the year. As a result, at the end of the second quarter of 2020, it reached 98.4 percent.
Loans, expressed as a percentage of GDP, increased by 3.6 percentage points by the end of the second quarter of 2020, compared to the beginning of the year, reaching 67.4 percent.
Deposits, expressed as a percentage of GDP, increased by 5 percentage points by the end of the second quarter of 2020, compared to the beginning of the year, reaching 57.4 percent.
By the end of July of 2020, the volume of loans (excluding interbank loans) in Georgia was increased by 19 percent, compared to July of 2019, and amounted to 35.2 billion lari ($10.8 billion).
Loans denominated in foreign currency were increased by 20 percent, while loans denominated in local currency were increased by 18 percent. During January-July of 2020, the significant increase was recorded by the end of March of 2020, when the volume of loans was 31 percent higher compared to the end of March of 2019. In this period loans denominated in foreign currency were increased by 36 percent, while loans denominated in national currency were increased by 25 percent.
In the period from January of 2017 to July of 2020 interest rates on loans denominated in national currency were characterized with more volatility than loans denominated in foreign currency. In July of 2020 interest rates on loans denominated in national currency were increased by 1.5 percentage points, compared to the corresponding period of 2019, and reached 15.7 percent, while interest rates on loans denominated in foreign currency were decreased by 0.5 percentage point and dropped to 6.6 percent.
According to the data for July of 2020, the difference between interest rates on loans denominated in national and foreign currencies amounted to 9.1 percentage points, which is 2 percentage points higher than in the corresponding period of 2019. Moreover, the average interest rate on loans denominated in national currency from January of 2020 to July of 2020 was 16.2 percent, while the average interest rate on loans denominated in foreign currency was equal to 6.5 percent. In contrast, the average interest rates for the corresponding period in 2019 were 15.3 percent and 7.3 percent, respectively.
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