Georgians trust US national currency
Deposits in US dollar make up 81.6% of all deposits in Georgia

Georgians prefer to save their money in United States (US) dollar rather than in the national currency despite the fact local banks offer better interest rates for deposits made in Georgian Lari (GEL).

This might be explained by the recent strengthening of the US dollar against different national currencies, including the Lari.

The larisation ratio, which measures the use of the domestic currency in the country’s economy, constituted 28.21 percent of all non-bank deposits last month, revealed new data published by the National Bank of Georgia (NBG).

Meanwhile deposits in US dollar made up 81.6 percent of all deposits made in foreign currencies, and deposits made in Euro made up 15.4 percent.

NBG said the interest rate for deposits in Georgian Lari was 10.8 percent and the interest rate for foreign currency denominated deposits was 3.9 percent.

The current trends of bank deposits and loan portfolio in Georgia’s commercial banks outlined by NBG showed the number and sum of deposits, as well as loans, increased in February 2016 compared to the previous month.

Current trends of bank deposits

The sum of deposits in Georgia’s banking sector exceeded 14.6 billion GEL in February 2016. This was a 0.5 percent increase, or 73.8 million GEL more month-on-month.

Last month the volume of term deposits increased by 35.5 million GEL, while demand deposits decreased by 38.3 million GEL.

How much did banks lend in January?

Commercial banks in Georgia lent 16.2 billion GEL in February 2016, which was 22.8 million GEL or 0.1 percent more compared to January 2016.

In terms of deposits, people in Georgia preferred to take loans in foreign currency instead of the national currency.

Statistics showed loans taken out in Lari decreased by 27.4 million GEL (0.5 percent) while the volume of loans in foreign currencies increased by 50.2 million GEL or by 0.5 percent in February.

There are 19 commercial banks in Georgia including 17 foreigI controlled banks and one branch of non-resident banks.

In February 2016, compared to the previous month, the total assets of Georgian commercial banks increased by 0.2 billion GEL (or by 0.6 percent) and constituted 25.5 billion GEL.

The NBG said the banking sectors’ own funds (equity capital) equalled 3.6 billion GEL, which made up 13.9 percent of the commercial banks' total assets.