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National Bank encouraging GEL deposits

By Messenger Staff
Wednesday, May 12
The NBG is encouraging further use of the local currency, the GEL, and is implementing different projects for this purpose. The bank management is talking about the necessity of issuing loans and making deposits in the local currency, as deposits in GEL carry less risk of fluctuation than those in USD.

Some foreign analysts however advise Georgian officials to be very careful about taking radical steps. If the bank officials suggest that making deposits in dollars is riskier than making them in lari there is a danger that some Georgians will prefer to transfer their deposit accounts in foreign currencies outside the country. Therefore this policy needs to be conducted in a thoughtful way and in a balanced, responsible and competent manner.

Despite the fact that higher interest rates are offered for making deposits in local currency most of the long term deposits are made in foreign currency, principally the USD or Euro. This means that the Georgian population still trusts foreign currencies more than the local one and forcing people to change could bring negative results.