National Bank Explains Drop in Refinancing Loans After Gotsiridze's Criticism
By Messenger Staff
Tuesday, July 21, 2026
The National Bank of Georgia said the decline in refinancing loans issued to commercial banks is linked to increased GEL liquidity in the banking system following foreign exchange interventions.
The central bank said it supplies banks with the amount of GEL liquidity demanded by the system and uses refinancing loans as one of several tools to balance liquidity and keep short-term interest rates close to the refinancing rate.
"The National Bank supplies the banking system with the amount of GEL liquidity for which there is demand within the system," the bank said.
According to the National Bank, the reduction in refinancing loans is mainly connected to foreign currency purchases that increased GEL liquidity in the banking system. The bank said it purchased USD 2.43 billion in 2025, which supplied the banking system with GEL 6.62 billion, while foreign currency purchases by May 2026 added another GEL 3.94 billion.
The statement came after opposition politician Roman Gotsiridze questioned the sharp decline in commercial banks' borrowing from the National Bank.
"Strange things are happening in Georgia's banking system. Commercial banks no longer want the National Bank's money. The National Bank should explain this development," Gotsiridze wrote on social media.
Gotsiridze said commercial banks had borrowed GEL 4.2 billion from the National Bank as of December 31, but the amount had fallen to around GEL 300 million.
"The volume of so-called refinancing loans has decreased thirteenfold over the past six months. While commercial banks had borrowed GEL 4.2 billion from the National Bank as of December 31 last year, that figure has now fallen to around GEL 300 million," he said.
He added that such a significant change required an explanation from the National Bank and suggested that the development could be linked to wider processes beyond the financial sector.
The National Bank said the increase in liquidity is connected to the accumulation of international reserves and favorable conditions in the foreign exchange market.
The central bank added that international reserves reached a record USD 7.12 billion as of June 2026, exceeding the International Monetary Fund's reserve adequacy benchmark at 112.3%.
