Georgian central bank sells $60mln in response to “recent volatility” in currency market

The National Bank of Georgia on Thursday said it had intervened with a $60 million injection at a foreign exchange auction in response to “recent volatility” in the currency market.

This decision was made to provide liquidity and address the excess demand for currency which resulted from recent large, one-time transactions that exerted additional pressure on the Georgian national currency exchange rate”, the body said.

The bank noted recent fluctuations were “short-term” and not driven by fundamental macroeconomic factors, adding “key economic indicators” remained “strong”.

International reserves are at a historic high, foreign inflows are stable, the current account deficit is at a historic low and high economic growth has been recorded over the past three years. Additionally, inflation is below the three percent target and both the fiscal balance and public debt are at sustainable levels”, the body said.

The National Bank added the country’s commercial banking sector was “robust”, with “healthy profitability, high-quality assets and solid capital and liquidity buffers”. 

These factors ensure that banks can continue to serve customers effectively and support economic lending. Currently, the banking system's liquid assets exceed ₾16.7 billion [$6.24bln], demonstrating exceptional resilience to potential shocks. Georgia's financial system is among the strongest in Europe”, it said.

The body added it would continue to monitor market conditions and utilise “all available tools” to maintain financial market stability.