BAKU, Azerbaijan, October 22
By Tamilla Mammadova – Trend:
As a result of the reforms carried out in previous years, Georgia’s financial sector faced the crisis prepared, with capital and liquidity buffers, high quality of assets, and historically low indicators of bad loans, said President of the National Bank of Georgia (NBG) Koba Gvenetadze, Trend reports via Georgian media.
He made the remark at the online meeting of managers of central banks of Near East and Central Asia, as part of the annual meetings of the International Monetary Fund (IMF) and the World Bank (WB).
The meeting participants discussed such topics as promotion of economic recovery through monetary and financial sector policies and maintaining financial stability. The meeting was led by Geoffrey Okamoto, the first deputy managing director of the IMF Koba Gvenetadze was invited as the leading speaker of the event.
At the meeting, the participants discussed the role of the financial sector’s policy in promoting inclusive growth, as well as financial stability aspects amid the COVID-19 pandemic.
Gvenetadze focused on mechanisms for the alleviation of negative impact on the financial sector amid the pandemic and measures taken for economic recovery, policy carried out for enhancing the financial sector, and the existing challenges in this regard.
“The pandemic generated several challenges in Georgia: First, we knew we had a healthy banking sector, but the size of shocks was unclear; Second, the market recorded confidence shocks that could frustrate the crediting process and enhance the shock. Third, there were high operational risks coming from the unidentified rates of the pandemic process, lockdown, and consequently, limited human resources for both regulators and the financial sector. To tackle these challenges, we prepared a temporary supervisory plan that enabled creditors to postpone the huge amounts of credit liabilities and simultaneously continue crediting the real sector,” Gvenetadze noted.
According to him, together with alleviating the monetary policy amid the pandemic, the NBG activated additional instruments through a supply of liquidity such as currency swaps for commercial banks and microfinance organizations, as well as small and medium sector’s crediting instruments.
"The pandemic goes on, but we believe that corresponding measures of monetary policy and timely use of macroprudential instruments will enable the financial sector to withstand the negative impact of the pandemic and make an essential contribution to the economic recovery of Georgia," Gvenetadze noted.
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