The 13th annual meeting of the Central Bank Governors’ Club of Middle Asia, Balkan and Black Sea basin countries was opened in St. Petersburg where the National Bank President Roman Gotsiridze is participating. Besides Georgia, the members of the Central Bank Governors’ Club of Middle Asia, Balkan and Black Sea basin countries are: Albania, Azerbaijani, Bosnia and Herzegovina, Bulgaria, Kazakhstan, Macedonia, Moldova, Russia, Romania, Serbia and Montenegro, Armenia, Greece, Kyrgyzstan, Tajikistan, Turkey and Ukraine. The first presentation was given by Malcolm Night on ‘The Role of the Exchange Rate in Formation of Monetary Policy in Developing Countries’. Lecek Balcerovic, president of the Naational Bank of Poland, discussed the progress of the reforms in the transition economies. In his presentation at the meeting, President Gotsiridze paid special attention to the developments following the Rose Revolution, accentuating the positive changes in fiscal and monetary spheres. President indicated that the political changes affected economic growth, expressed in doubling of the state budget and considerable increase of the National Bank’s foreign exchange reserves. A significant part of the presentation was devoted to the new approaches of the Bank’s monetary policy used for neutralizing the negative effect of the excess inflow of revenues from privatization on inflation processes. This issue aroused great interest of the audience. Almost all speakers provided their feedback to it as the inflow of the excess currency from either privatization, or sale of oil products and other natural resources is evident in many countries. To solve this problem, many countries use so called ‘stabilization reports’ or create stabilization funds. Such fund exists in Russia. The law prohibits spending the excess revenue from this fund except the cases when the budget deficit has to be covered or external debt paid. Czech Republic has a similar system where privatization revenues are accumulated on a special treasury account and are used for stage-by-stage financing of the budget. The situation is similar in Romania, too. Sergey Ignatyev, president of the Central Bank of Russia, offered President Gotsiridze to do the on-site study of the fund’s activities. President was also invited to pay an official visit to Poland by Lecek Balcerovic, president of the Naational Bank of Poland. In the second half of the day, President Gotsiridze discussed the situation in Abkhazia, where the Russian commercial banks are involved in illegal cooperation with Abkhazian banks. NBG President required the termination of this malpractice. He thanked those members of the club, who, based on the international law requirements, refused to cooperate with the illegitimate banking institutions of the breakaway regions, including Abkhazia. Besides the Russian banks, the Kyrgyz commercial banks also cooperate with the Abkhazian commercial banks. President Gotsiridze addressed Ulan Sarbanov, chairman of the Kyrgyz National Bank, for feefback. Ulan Sarbanov promised President Gotsiridze to take strict measures to prevent this illegal cooperation between Kyrgyz and Abkhazian banks. Before the meeting, President Gotsiridze had addressed the chairman of the Central Bank of Russia and President of the National Bank of Kyrgyzstan to ask to prevent the illegal cooperation with the Abkhazian banks, ask the appropriate agencies to study the problem and make a decision according to the UN Security Council Resolution, decisions of the leaders of the CIS countries on Abkhazian conflict resolution and WTO principles. Otherwise, if Russia fails to use the tools it has at hand, the National Bank will address the FATF and MONEYVAL to ask to impose sanctions against Russia.