Georgian central bank introduces new instrument to replenish international reserves
So far this year the NBG purchased over $40 million at foreign exchange auction. Photo: Nino Alavidze/Agenda.ge.
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The National Bank of Georgia (NBG) will use a new instrument, FX Options, to replenish its international reserves.
This tool will provide more clarity about the expected foreign exchange purchases by the NBG and ensure that the purchase of currency will have minimal impact on the exchange rate”, stated the NBG.
The NBG says that filling the international reserves is important for the macro-financial stability of the country.
When the reserves are at an adequate level this reduces the risk of crisis, which contributes to the growth of investor confidence in the country. Keeping international reserves at adequate levels is essentially important for countries like Georgia - with a high dolarisation rate and with small and open economies”, said the NBG.
So far this year the NBG purchased over $40 million at foreign exchange auction, while in 2018 the NBG purchased $197 million in total.
Currency reserves reached a historic high since the independence of Georgia in December of 2018 when the currency reserves increased by $201 million to $3,289,847,600. Despite this record currency reserves remain at the same level as in 2013.
The biggest drop in currency reserves occurred in 2014-2015 when the NBG started to sell reserves to mitigate the currency crisis in Georgia.
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