BAKU, Azerbaijan, Nov. 11
By Tamilla Mammadova – Trend:
The National Bank of Georgia (NBG) has taken decisive actions to mitigate the impact of the pandemic on the real economy and the financial sector, Trend reports via the International Monetary Fund (IMF).
IMF staff team led by Mercedes Vera Martin conducted virtual discussions from October 5 to November 9, 2020, on the Seventh Review under the Extended Fund Facility (EFF) arrangement.
As the IMF said, the NBG provided lari and US dollar liquidity and coordinated with the Ministry of Finance the provision of long-term lari liquidity.
"We welcome the authorities’ continued commitment to the inflation-targeting framework and the floating exchange rate. The NBG reduced its policy rate by a cumulative 100 basis points since April 2020 and appropriately maintains rates steady since August to firmly anchor inflationary expectations around its inflation target. Staff supports the current monetary stance, which should be maintained until there are clear signs that inflation remains on a downward trend in the context of recent lari depreciation. Keeping inflationary expectations anchored may call for tightening the monetary policy stance should pressures on lari exchange rate feed into expectations," the report said.
According to the IMF, banks have been generally resilient amid the pandemic, helped by their sound initial capital and liquidity positions and the strong response by the NBG in dealing with the shock. Staff welcomes the NBG’s proactive monitoring of the impact of the crisis on asset quality in coordination with the banks, while also making further progress in implementing the resolution framework.
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