Acting National Bank Governor: Standard & Poor's rating confirms confidence in Georgian banking system
The NBG said the rating agency cited the stability of the financial sector as a “strength” of the Georgian banking industry, which it said was supported by a macroeconomic environment reflected in the level of capitalisation and liquidity, as well as profitability and low credit losses. Photo: NBG
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Natia Turnava, the Acting Governor of the National Bank of Georgia, on Monday said the latest review of Standard & Poor's, an American credit rating agency, “confirmed” the Georgian banking system was “developing sustainably” and confidence in the sector was “high”.
S&P last week published an overview of the risk assessment of banking sectors in various countries that evaluated trends, strengths and weaknesses, main challenges and macroeconomic risks.
The NBG said Georgia had maintained its positions in the rating this year with seven points, which it called “one of the highest ratings” compared to the countries of the wider region.
Despite the unstable environment in the region, Georgia's score remained unchanged, while the position of the banking system has improved in the criterion of economic imbalance, and the assessment has been reduced from high risk to medium risk”, Turnava said.
The NBG said the rating agency cited the stability of the financial sector as a “strength” of the Georgian banking industry, which it said was supported by a macroeconomic environment reflected in the level of capitalisation and liquidity, as well as profitability and low credit losses.
Compared to other countries of the region, the effectiveness of the monetary policy of Georgia is high. In July 2023, against the background of the strengthening of the national currency and the reduction of prices for commodity products, inflation decreased, as a result of which the National Bank lowered the refinancing rate”, S&P said.
The rating agency also shared inflation forecast for next year, saying it would be 2.4 percent on average and would remain close to the target level in 2024.
At the same time, the S&P emphasised high dollarisation remained the “main challenge” in the banking sector of Georgia. Turnava acknowledged the issue and said her office was “actively working and planning to take further steps in the direction of reducing dollarisation”.
The Georgian central bank also said it had made “significant progress” in reducing dollarisation, which currently stands at 45 percent in loans.
Georgian Prime Minister Irakli Garibashvili and members of the Government's Economic Council met on Saturday to discuss the double-digit economic growth rate achieved over the past two years in Georgia - 10.5 percent in 2021 and 10.1 percent in 2022, as as result of the Government’s “proper policy”, the Government Administration said.
Georgian Economy Minister Levan Davitashvili on Tuesday said the "positive trends" of the country's economic growth from 2022 were expected to be maintained this year due to its multifaceted form over the past 12 months.
Fitch Ratings, a global financial ratings firm, in its update on Friday, has affirmed Georgia’s Long-Term Foreign-Currency Issuer Default Rating status at a BB level, revising the financial outlook for the country’s financial developments from “stable” to “positive”.
S&P said the ratings are supported by Georgia's ‘relatively strong institutional arrangements when compared regionally; its floating exchange rate regime; and the availability of timely, concessional financing from IFIs under extenuating circumstances’.
Standard & Poor's (S&P) Global Ratings has raised its long-term foreign and local currency sovereign credit ratings on the Government of Georgia to 'BB' from ‘BB-’. It also affirmed the short-term ratings at 'B'. The outlook is stable.
The Monetary Policy and Financial Stability committees of the National Bank of Georgia met on Wednesday to discuss mitigating impacts of international financial circumstances on the domestic economy.
Customers of commercial banks, microbanks, registered payment service providers and microfinance organisations operating in Georgia will be able to file complaints on services or violations with the Dispute Resolution Commission of the National Bank of Georgia, with the body set to launch its operations on December 1.
Standard & Poor's Global Ratings has affirmed Georgia’s long- and short-term foreign and local currency sovereign credit ratings at 'BB/B' with a stable outlook.
The National Bank of Georgia on Friday said the domestic financial system was maintaining “stability” and continued lending to the economy, while banks maintained “healthy” capital and liquidity ratios as of January, and credit activity was at a “sustainable” level.