National Bank’s Acting Governor defends institution’s independence, alignment with int’l sanctions

Turnava briefed the Parliament's Committee about main directions of monetary and credit policy of NBG for 2024-2026. Photo: Parliament press office, 06 Dec 2023 - 17:02, Tbilisi,Georgia

Natia Turnava, the Acting Governor of the National Bank of Georgia, on Wednesday defended her institution's "effective policy" and asserted its independence and alignment with international sanctions before the Parliament.

Addressing questions from lawmakers of the Finance and Budget Committee, Turnava criticised Roman Gotsiridze, an opposition MP and former Chair of the Bank, for his critical assessments of the NBG's current stance and recent decisions. She claimed the institution's independence was guaranteed by the domestic constitution and laws.

Emphasising the independence and effectiveness of the Bank’s monetary policy, Turnava stressed "our monetary policy is both independent and effective, as evidenced by the focus on price stability". She also credited the Government's policies for contributing to this “success” and pointed out ongoing efforts for further institutional strengthening of the Bank.

One of the main measures of the effectiveness of our monetary policy is price stability. We believe the result is achieved through the joint efforts of the Government and the Bank management", she told MPs. 

She pledged the institution would "never be used" to evade international sanctions imposed on Russia for its ongoing invasion of Ukraine, affirming the alignment of the domestic financial system with sanctions and noted there had been "no confirmed violations" of the sanctions through Georgia.

Our financial system fully complies with international sanctions, and not a single confirmed fact of a violation of sanctions has been observed or occurred here. We also control our financial system in this direction", the Bank official said. 

In response to opposition’s criticism of her decision in September to amend the regulation on compliance with international financial sanctions against Russia to exempt Georgian citizens from sanctions without domestic court judgment, Turnava claimed the move was not connected to Otar Partskhaladze, the former Prosecutor General who was sanctioned by the United States in September for alleged connections with Russian intelligence.

She argued that aligning enforcement of international sanctions with domestic laws carried "no risks - on the contrary, such decisions reduce risks". 

Dismissing allegations of making revisions to decisions to gain backing of domestic banks, Turnava asserted "no revision” was being carried out and said the NBG was "consistently implementing policies aimed at price level stability, transparency, stability of the financial system".

Emphasising the need for monetary policy to be “relevant to a specific economic cycle”, Turnava added there was a “period for [both] tightening and easing [the policy]”.

She told lawmakers in a situation when inflation had been “much lower than the target” for months, the economic situation was “stable” and indicators “healthy"