Koba Gvenetadze participated in the Governor Talks organized by the IMF

Koba Gvenetadze participated in the Governor Talks organized by the IMF

12 April, 2019

Governor of the National Bank of Georgia Koba Gvenetadze participated in the Governor Talks organized by the IMF. Such discussions are held with the representatives of five regions of the world during the Annual and the Spring Meetings of the International Monetary Fund and the World Bank Group in order to share the successful experiences of specific economic directions. The moderators are the IMF Regional Directors.

This year's discussion will be held with the Minister of Finance of the Netherlands (The Euro Area), with the Governor of Central Bank of Paraguay (WHD), with the Governor of Reserve Bank of India (APD) and with the Minister of Economy and Finance of Benin (AFR).

This year's Governor Talks was opened by the speech of Mr. Koba Gvenetadze. The main topic of discussion was NBG's experience with implementing inflation targeting, including building capacity. Mr. Jihad Azour, Director of Middle East and Central Asia Department of the IMF was a moderator. Mr. Azour stressed the successful practice and experience of the National Bank of Georgia in implementation of inflation targeting regime with floating exchange rate. The impressive progress in larization was also mentioned as the important factor for reducing the vulnerability of the financial sector.

The NBG Governor focused on Georgian experience with inflation targeting, benefits brought and exchange rate flexibility. According to him "The experience of Georgia shows that flexible exchange rate ultimately serves as a shock-absorber and helps to overcome the external shocks with minimal social costs. Maintaining the exchange rate flexibility is necessary  to support the long-term economic growth and employment in the country".

Mr. Gvenetadze also focused on dollarization as a big challenge for small open economies such as Georgia. 

"The National Bank of Georgia actively implements the comprehensive de-dollarization measures. The de-dollarization measures have already shown good results, both deposit and loan dollarization have decreased by around 9 percentage points" - Mr. Koba Gvenetadze stated.

Koba Gvenetadze talked about the reforms implemented by the National Bank of Georgia. According to him the central bank improved the liquidity management in the financial sector of the country. In particular, the development of new liquidity supply instrument helped to significantly decrease the short-term interest rate volatility and consequently monetary policy transmission to the real economy was strengthened.

At the end of the discussion, Koba Gvenetadze discussed the importance of active and regular communication under inflation targeting regime. According to him the NBG pays particular attention to the growing transparency and development of various communication channels. Regular communication helped anchor inflation expectations better and was positively reflected on the efficiency of monetary policy and its impact on the economy.

Governor of the National Bank of Georgia Mr. Koba Gvenetadze participates in the IMF and World Bank Group Spring Meetings. The Spring Meetings are attended by the Governors and Alternate Governors of the IMF and the World Bank and by the representatives of the financial sector from almost all countries of the world.