Despite the ongoing depreciation of Georgia’s national currency against the US dollar and Euro, more people in Georgia are taking out loans in foreign currencies.
Latest data from the National Bank of Georgia (NBG) revealed the number of loans taken out in foreign currencies had surged by 89.2 million GEL this month despite Georgia’s national currency, the Lari, continuing to depreciate.
The Lari started dropping in value against the greenback in November 2014. At this time the exchange rate saw 1 USD valued at 1.75 GEL. However today, the official price of 1 USD reached 2.4067 GEL. The previous exchange rate was 2.4060 GEL.
The Lari experienced similar depreciation against the Euro, where from December 30, 1 EUR will cost 2.6394 GEL while the previous rate was 2.6435 GEL.
The Lari depreciation has mainly affected people who have loans in the US dollar but earn an income in Lari.
Latest NBG data showed the amount of lending by commercial banks (including loans to non-residents) in November 2015 increased by 17.8 million GEL (0.1 percent) compared to the previous month and exceeded 15.8 billion GEL by December 1, 2015.
The amount of loans in the national currency decreased by 71.4 million GEL (1.3 percent) and the volume of loans in foreign currencies increased by 89.2 million GEL (0.9 percent) in the same period.
As of December 1, 2015, the banking sector in Georgia was represented by 19 commercial banks, including 17 foreign-controlled banks and one branch of non-resident banks.
Compared to the previous month, the total assets of Georgian commercial banks increased (in current prices) by 0.2 billion GEL (or by 1.0 percent) and constituted 24.6 billion GEL.
The banking sector's own funds (equity capital) equalled 3.4 billion GEL, which made up 13.7 percent of the commercial banks' total assets.
The share of foreign capital in banks' total paid-in capital constituted 80.2 percent.
In November 2015, the banking sector finished with a net profit of 53.6 million GEL.
The five banks with the largest assets constituted 78.0 percent of the banking sector's total assets.