Central Bank: Georgian financial system ready to withstand stress amid Russia-Ukraine war

Uncertainty over macroeconomic trends is high amid the Russia-Ukraine war, but Georgia's financial system is ready to withstand stress, the National Bank of Georgia said on Wednesday.

The banking sector remains resilient even in the face of severe and extreme risk scenarios. Despite the possible losses, the existing capital buffers allow for their absorption," the NBG said in the update on the matter.

The central bank noted the direct sanctions imposed by the international community against Russia due to its invasion of Ukraine had affected only one subsidiary of a Russian bank in Georgia.

"This problem was soon resolved by the bank selling part of its assets and liabilities to other banks. Also, if necessary, the National Bank will take countermeasures, as it did in the early days of the pandemic, to help sustain the financial sector,” the statement also noted.

“It should be noted that the current macroeconomic developments once again clearly show the correct, forward-looking policy of the National Bank to reduce dollarisation," the Bank also pointed out.

The NBG also said that the financial sector of Georgia maintained “resilience” and continued its funding of the economy.