BAKU, Azerbaijan, April 28
By Tamilla Mammadova – Trend:
The National Bank of Georgia (NBG) has changed rules on the minimum reserve requirements for banks, Trend reports via the NBG.
According to the option presented by the NBG, the reserve requirement will depend on the volume of foreign currency deposits in the banks. The higher is the dollarization of bank deposits, the higher will be the minimum reserve requirements. With this model, the NBG plans to increase the larization of deposits in the banking system.
"Starting from July, the minimum reserve requirements for funds attracted in foreign currency will be determined individually, for each commercial bank, according to the deposit dollarization of each bank. In particular, unless the deposit dollarization rate exceeds 40 percent, the reserve requirement norm will be reduced from 25 to 10 percent for funds borrowed in a foreign currency and with a remaining maturity of up to 1 year. If the deposit dollarization is 70 percent or above, reserve requirements will still be 25 percent," the NBG said.
Finally, for the deposit dollarization in the range of 40-70 percent, the reserve requirement norm will decrease linearly from 25 percent to 10 percent along with a decrease in the deposit dollarization.
Similarly, the reserve requirement will be reduced from 15 percent to 10 percent for foreign currency-denominated funds with a remaining maturity of 1 to 2 years," the statement of the NBG reads.
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