National Bank: Georgian financial system “stable”, banks with “healthy” capital, liquidity ratios

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. 

The Bank said today’s meeting of its Financial Stability Committee decided to recalibrate the liquidity requirement for foreign currency deposits of non-residents. 

Deposits placed by non-resident individuals and legal entities are less stable than those of residents. Accordingly, the National Bank has established a higher liquidity requirement for similar deposits”, the NBG said.

It added the body had increased the liquidity requirement to 80 percent last year in order to mitigate “risks arising from the excessive growth” of foreign currency deposits placed by Russian residents in Georgia.

Since then the volume of accounts and deposits of Russian residents has stabilised, while the share in total deposits has decreased”, the Bank said.

Today’s decision of the Committee served to set the liquidity requirement for foreign currency deposits of Russian residents proportionately - at average 40 percent - to the liquidity requirement of other non-resident deposits.