Chief of Georgia’s Bank Association approves Gov’t choice to convert loans from USD into GEL

The executive director of Georgia’s Bank Association says an agreement between the Government and the National Bank of Georgia (NBG) to offer people the ability to convert loans from US dollar into the national currency was appropriate and relevant. 

The Bank Association key figure Giorgi Tsutskiridze made a statement in the wake of Prime Minister Giorgi Kvirikashvili’s announcement yesterday that Georgian citizens who took out s loan in US dollar before January 1, 2015 could convert their loan into Georgian Lari (GEL).

If the exchange rate between Lari and US dollar is 2.50, the loan will be converted at a rate of 2.30,” Kvirikashvili said, adding the 20 Tetri difference would be covered by the state budget. 

Tsutskiridze said this solution would ease the financial obligations of many Georgian citizens who currently faced a tough situation as the Lari continued to fall in value against the US dollar. Currently one USD was worth 2.53 GEL. 

The step will also help the state economy as many Georgians were involved in the loan problem,” Tsutskiridze said.

 The Bank Association unites 21 commercial banks and one micro-financing organisation in Georgia.

Tsutskiridze also responded to the Government’s intention to support the national currency, which meant issuing loans up to 100,000 GEL by Georgian banks from next year only in GEL, and that companies which operate in Georgia must firstly announce prices of their products in GEL before having secondary prices in other currencies.

He stressed for less dependence on foreign currencies, Georgia should boost production of locally-made products and be less dependent on imports.