45,349 Russian citizens opened accounts in Georgian banks after February 24, IDFI publishes research
By Liza Mchedlidze
Friday, October 7, 2022
According to the Institute for Development of Freedom of Information (IDFI), 45,349 citizens of Russia opened new accounts in commercial banks of Georgia in the period from Russia's invasion of Ukraine to August 31.
According to IDFI, in the period from February 24 to August 31, 2022, 19 legal entities registered in Russia opened accounts in Georgian banks.
According to the organization, after the start of the Russia-Ukraine war, as a result of the active entry of Russian citizens into Georgia and the opening of bank accounts, the rate of deposits placed by them in commercial banks has increased significantly.
According to the published data of IDFI, as of August 2022, deposits placed by Russian citizens in commercial banks of Georgia amount to 1.88 billion GEL. The balance of funds placed on deposits by Russian citizens increased by 170%, by approximately 1.2 billion GEL, compared to the pre-war period (until February 24, 2022).
72% (1.36 billion) of the money on deposits by Russian citizens is placed in US dollar currency, while only 0.06% (1.2 million) is placed in Russian rubles.
"As of August 2022, 53% of the deposits placed by Russian citizens are demand deposits, 21% are current accounts, and 26% are time deposits. It is noteworthy that the share of time deposits reached 60% in the period before the war." IDFI wrote.
According to the organization, after the start of the Russia-Ukraine war, the active influx of Russian citizens into the country did not have a significant impact on the volume of loans received by Russian citizens in Georgian financial organizations.
According to the data received from the National Bank, after the start of the Russia-Ukraine war, the turnover rates of the Russian ruble at the currency exchange points in Georgia also increased significantly.
According to IDFI, in the second quarter of 2022, Georgian currency exchange offices bought 949.8 million rubles (about 45 million GEL or 16 million USD equivalent at today's exchange rate) and sold 929.4 million rubles. This data is three times more compared to the same period in 2021.
The organization wrote that the analysis of the data received from the National Bank of Georgia revealed that after the Russian invasion of Ukraine, the activation of the entry of Russian citizens into Georgia significantly contributed to the growth of the funds at the disposal of Russian citizens in the commercial banks of Georgia.
As an example of this, IDFI cites the data discussed above: 45,349 citizens of Russia opened new bank accounts, the balance of deposits increased by 170%, and the turnover rates of the Russian ruble increased three times. According to the data of the National Bank, the figures for remittances from Russia to Georgia have also increased significantly.
Based on data analysis, IDFI states that the inflow of financial resources from Russia to Georgia has had a short-term impact on Georgia's economic indicators, including economic growth and currency exchange rate stabilization. However, according to the organization, the tendency of Russian citizens to stay in Georgia may create challenges in terms of security.
"Analysis of the data shows that the circumstances created as a result of Russia's invasion of Ukraine contributed to the inflow of significant financial resources from Russia to Georgia, which in turn had an impact on various economic indicators of the country in the short term. Among them are economic growth, strengthening of the exchange rate, and others.
IDFI believes that, despite some positive economic effects obtained by the active entry of Russian citizens into the country in the short term, the growing tendency of them to stay in the country may represent a challenge from the point of view of state security, which requires appropriate measures in terms of risk reduction" IDFI wrote.
