2016 Annual Report of the National Bank of Georgia Has Been Approved By Parliament of Georgia
Parliament of Georgia unanimously, by 82 votes for supporting the draft resolution "On the National Bank's activity report for 2016", which was presented at the legislature body by the Governor of National Bank of Georgia, Koba Gvenetadze.
The annual report of the National Bank presents in detail the NBG activities in 2016 as well as Bank's view on the processes that took place both within our country and abroad and had a significant influence on the state of Georgian economy and implementation of the NBG objectives.
The Governor of NBG stated, that the reaction of county's central bank was permanently adequate towards world economy and the ongoing processes in the region.
Koba Gvenetadze highlighted the main objectives of NBG and commenced by discussing the price stability: "To maintain price stability, NBG uses inflation targeting regime, which is the best practice in the modern monetary policy. Moreover, I would like to note, that price stability implies maintaining the inflation rate close to target rate over the medium term. In the short term, inflation may stay above or below the target rate, however as a result of the National Bank of Georgia's policy, the inflation will return to its target rate in the medium term", - stated Koba Gvenetadze.
The Governor of the National Bank of Georgia stressed the importance of the main challenge of economy - high degree of dollarization and National Bank's measures towards this direction. "In 2016, similarly to previous years, high dollarization remained as a challenge for the Georgian economy. The National Bank of Georgia developed new measures together with the Government of Georgia to support the larization - 10-point plan, which includes increased access to long term resource of lari, adequate sharing of FX risks and pricing in lari. To enhance larization it is necessary to have a long term lari resource on the market. For this capital market development and rising volumes of national currency denominated long-term bonds are essential. Together with the Government of Georgia, we have established and are implementing the development strategy for capital markets", - stated Koba Gvenetadze.
While presenting the annual report, the Governor of the National Bank of Georgia also discussed the changes implemented within the supervisory framework, Koba Gvenetadze specified that: "Relating to the bank supervisory, based on the joint mission of International Monetary Fund (IMF) and World Bank (WB) implemented program in 2014 - Financial Sector Assessment Program (FSAP) recommendations and procedures determined by Georgia-EU Association Agreement, in 2016 the working process on the package of the legislative changes have been ongoing. The legislative package includes changes in various laws (including the "Law of Georgia on Commercial Banking Activities and the "Organic Law of Georgia on the National Bank of Georgia"), which will enhance the supervisory board and ensure its compliance with the international practice. Above mentioned changes shall strengthen the National Bank of Georgia's authority within the implementation of consolidated banking group supervisory: towards appointing temporary administration in commercial banks and more effective implementation of risk based supervisory, including license of commercial banks and the decision making process of purchasing significant shares."
During the parliament session, the Governor of the National Bank of Georgia also discussed the consumer right's protection, which is one of the priorities for the national bank. "2016 was important for the development of frameworks of consumer right's protection: according to the problems reported in the previous years, new regulation has been implemented and approved, which responds to the challenges in the consumer's rights protection sector and includes not only commercial banks, but the whole finance sector representatives. Moreover, the National Bank of Georgia has created the consumer's rights protection and financial literacy department, which will support and increase financial literacy throughout the country and will ensure consumer right's protection framework's compliance", - stated Koba Gvenetadze.