National Bank to raise ceiling on yuan and Asian market holdings in Georgia’s reserves from 5% to around 15%, says Turnava

“Our reserves are denominated in dollars because we follow the structure of the state debt. However, as part of our diversification policy, we have bought both monetary gold and other currencies, including the Chinese yuan, which makes our reserves more resilient,” said Natia Turnava, Governor of the National Bank of Georgia (NBG).

Turnava explained that Asian markets, including China’s capital market, move differently. For example, when shocks hit Western markets, Asian markets may follow a different course, which makes the National Bank’s reserves more resilient overall.

“Our reserves are denominated in dollars because we follow the structure of the state debt. However, as part of our diversification policy, we have bought both monetary gold and other currencies, including the Chinese yuan, which makes our reserves more resilient. We invest these reserves. Asian markets, including China’s capital market, move differently. For example, when shocks hit Western markets, those markets may follow a completely different course, and that makes our reserves more resilient overall. Until now we had a permitted limit of 5%, and we think we will gradually increase it in the near future. For now we will probably stay at around 15%, and later we will see whether that is justified,” Turnava said.