Parliament committee criticizes head of the National Bank
By Thea Mariamidze
Wednesday, may 27
The Budgetary and Finance and Economic Committees of Parliament assessed the 2014 year report of National Bank of Georgia (NBG) as unsatisfactory.
The President of National Bank of Georgia Giorgi Kadagidze introduced last year’s report at the session of the Committees on May 25.
The report submitted the priority directions, which were used by the NBG to achieve its goals in order to stabilize economic situation in the country.
It also included the assessments of the National Bank about the current processes within and abroad Georgia.
The President of the National Bank underlined that for the first time since 1994 the National Bank has no debts.
“The further team, which we will give to the institution of the National Bank, will get strong and well structured institution without debts,” Kadagidze stated.
He mainly spoke about the devaluation of the lari against the dollar, saying that the current situation was created not only because of internal problems, but mainly because of external geopolitical situation in Europe.
“The tense geopolitical situation in Europe caused the unprecedented appreciation of the dollar, together with a number of factors it reflected in the relationship with the country's main trading partners and in transactions, which caused reduced transfers, reduced exports and a halt in tourism,” Kadagidze stated.
According to Kadagidze, the NBG is fighting against dollarization and due to the development of monetary instruments more than half of the population has loans in lari not in dollar.
“We managed to reduce the dollarization of loans from 75% to 48%, which made the devaluation less painful for the population,” he claimed.
He said that the National Bank can do nothing more to improve the situation and reduced inflow of foreign currency as incorrect steps could have far more serious effects on the economy of the country.
In his report, the President of the NBG also said that despite the anti-bank attitudes in the country, the population still has a very high confidence in the banking sector and the speculations against the National bank may have serious negative impact on the economic situation in the country.
Kadagidze excluded further depreciation of the national currency, because the situation has improved in the directions of tourism and export.
Nearly all attendants of the session disapproved the report presented by Kadagidze.
The members of the majority noted that the answers to the questions were unsatisfactory and vague.
The MP Jaba Ebanoidze said that the statement of Kadagidze, that NBG can do nothing to improve current situation in the country, is absurd and the National Bank together with the government are responsible for the country's financial and economic processes.
The member of the Georgian Dream Davit Lortkipanidze accused Kadagidze manipulating the figures.
"I think the president of the National Bank and us live in different countries. His report is demagogy and manipulation of figures. The report leaves a lot of questions,” the MP stressed.
After the session, Kadagidze rejected all charges saying that all international partners assessed their activities positively.
“The Monetary Fund, the European Bank for Reconstruction and Development, the World Bank and all our international partners assessed our business positively. It is a pity that the committee members have different opinions," he said.
