Different opinions on treasury liabilities

The Georgian Government is quite enthusiastic and optimistic about the idea of issuing treasury liabilities. Over three months starting from August auctions will be held and by the end of this year GEL 160 million worth of treasury bonds will be sold.

The Government thinks that this step will stimulate the economy. Banks have resources but are reluctant to give this money to clients directly. Therefore the state will now take this money from the banks and use it in appropriate ways. Some economic analysts however challenge this approach. Professor Nodar Khaduri thinks that the banks don’t have enough resources to participate in the auctions.

Georgia has very controversial experience of issuing treasury liabilities. In 1999-2000 treasury liabilities were the subject of different manipulations. There was talk of issuing treasury liabilities in 2005-2006 but the Government eventually gave up this idea.