IFC helps Bank of Georgia improve exchange rate risk management with swaps
By Messenger Staff
Friday, June 4
IFC, a member of the World Bank Group, will provide Bank of Georgia with multiple US dollar and euro currency swaps over the next two years, enabling the bank to better manage its euro deposit base and provide a wider range of deposit products to customers, thereby enhancing Georgia’s financial system.
This is IFC’s first deposit hedging project in Georgia and it will fill an important market gap in the aftermath of the global financial crisis. The transaction will be implemented under the existing IFC and Bank of Georgia International Swaps and Derivatives Association Master Agreement, the international legal documentation for the execution of risk management transactions, signed in May 2009.
The agreement is part of IFC’s strategy tot introduce innovative products to its clients in Europe and Central Asia to enhance risk management capacity. “This transaction gives Bank of Georgia a better tool for currency risk management and reduces the cost of hedging foreign exchange risk,” said Irakli Gilauri, Bank of Georgia’s CEO. “It will enable us to hedge our foreign exchange risk for up to euro 30 million.”
Thomas Lubeck, IFC Regional Head in the Caucasus, said, “We are glad to expand cooperation with our long-term partner, Bank of Georgia. This innovative tool will support the bank, and it’s a perfect example of the high value-added services that we provide our clients.”
This is IFC’s first deposit hedging project in Georgia and it will fill an important market gap in the aftermath of the global financial crisis. The transaction will be implemented under the existing IFC and Bank of Georgia International Swaps and Derivatives Association Master Agreement, the international legal documentation for the execution of risk management transactions, signed in May 2009.
The agreement is part of IFC’s strategy tot introduce innovative products to its clients in Europe and Central Asia to enhance risk management capacity. “This transaction gives Bank of Georgia a better tool for currency risk management and reduces the cost of hedging foreign exchange risk,” said Irakli Gilauri, Bank of Georgia’s CEO. “It will enable us to hedge our foreign exchange risk for up to euro 30 million.”
Thomas Lubeck, IFC Regional Head in the Caucasus, said, “We are glad to expand cooperation with our long-term partner, Bank of Georgia. This innovative tool will support the bank, and it’s a perfect example of the high value-added services that we provide our clients.”