The use of the domestic currency, the lari, in Georgia’s economy is increasing thanks to the efforts taken by the government to strengthen lari-denominated economic activity.

The share of the US dollar in loans taken by individuals has recently declined from 58 percent to 48 percent, while the share of the US dollar in total loans fell from 65 percent to 58 percent, says Georgia’s Finance Minister Dimitry Kumsishvili.

In his words the International Monetary Fund and the World Bank positively praised Georgian Government’s and the National Bank of Georgia’s (NBG) works in the de-dolarisation process.

The high coefficient of dolarisation is a serious challenge for many countries and various governments and central banks try to overcome this challenge,” said Kumsishvili.

De-dolarisation was one of the main topics of discussions at the International Monetary Fund (IMF) and the World Bank Consultancy Meeting 2017 which took place on June 9-11 in Armenia.

Consultancy Meeting 2017 took place in Armenia last week. Photo by Georgia's Finance Ministry. 

Kumsishvili also attended the meeting together with the Georgian delegation which included head of the NBG Koba Gvenetadze, Minister of Infrastructure Zurab Alavidze and other high-ranking officials.

As of March 2017 a total of 5,617 loans worth up to $80 million have been converted into the lari within the framework of the Program on the Larisation of Loans.

The Program on the Larisation of Loans was approved by the Government of Georgia on January 11 in a bid to ease the debt burden in the country caused by the fluctuation of the lari against foreign currencies in the second half of last year.

The Program started on January 17 and continued for two months. This was a one-time measure for borrowers who were hit hard by the sharp depreciation of the exchange rate.

Per the program, loans received in US dollars before January 1, 2015 and signed for against real estate collaterals were eligible for conversion into lari-denominated loans.

In total 33,000 loans were identified as falling under the program’s eligibility.