ECONOMIC PRESS MONITOR
January 30, 2020
1. BANKEBI DA FINANSEBI: “IN TBILISI, TRADE IN FLAMMABLE SUBSTANCES AND SECOND-HAND TIRES WILL BE FORBIDDEN”
Tbilisi City Hall drafted the bill, which forbids trade in flammable substances and second-hand tires in Tbilisi, the newspaper reports.
Tbilisi Vice-Mayor Irakli Khmaladze specified that according to the bill, “Tbilisi Sakrebulo will determine places, where realization is allowed and where it is not allowed”. This rule will be submitted to Sakrebulo in near future, he declared to journalists.
Khmaladze also indicated that in the next one or two weeks, statement will be made regarding Eliava market (Tbilisi wholesale market of construction materials) (published on January 29).
2. BANKEBI DA FINANSEBI: “WHAT WILL BE NEW OFFICE OF NATIONAL BANK, FOR WHICH CONSTRUCTION, SUPPOSEDLY, 50M LARI WILL BE SPENT”
Construction of new A-class office of National Bank of Georgia (NBG) will cost, supposedly, 50 million lari and will take about 3-4 years, the newspaper reports.
NBG president Koba Gvenetadze said that the company, revealed by competition, already developed design of the office. “The same company has submitted the application to urban development service of the City Hall [of Tbilisi] for receiving so-called planning task of the development regulation plan”, he declared to journalists.
According to the National Agency of State Procurements, the competition was won by American GLMV Architecture Inc, with which contract worth 2.54 million lari is signed, the newspaper reports (published on January 29).
3. REZONANSI: “IT BECAME CLEAR, HOW NATIONAL BANK WILL SOFTEN BANKING REGULATION SINCE MARCH”
Introduction of banking regulation about 2 years ago caused certain problems, and all parties speak about necessity of softening, the newspaper says and notes that “the ice will be broken since March”.
“We study the details, consideration is actively conducted”, declares Koba Gvenetadze, president of National Bank of Georgia (NBG). The expected changes are of technical nature and envisage simplification of bureaucracy that will make regulation more flexible, he explains.
Alexander Dzneladze, president of Georgian Banking Association, also confirms that there will be “changes of technical character and nothing will change fundamentally”. “Principle of the regulation will remain income-focused – in the direction of income confirmation and credit issuance or annual payment calculation, guided by it”, he explains.
“In general, we constantly spoke that the mentioned regulation was excessive”, Dzneladze declares.
In his turn, head of Society and Banks organization Giorgi Kepuladze declares: “It would be good in general, if there was more predictability and more clarity in connection with any regulation”.
As Kepuladze indicates, “If to overlook projects of previous year, it could be said that the banking sphere “survived” these regulations. Restrictions created a problem rather to the non-banking sphere – to microfinancial organizations, pawnshops, various companies of household appliances” (published on January 29).
4. REZONANSI: “HOPE DISAPPEARED: LARI STARTED DEPRECIATION INSTEAD OF STRENGTHENING”
Strengthening of lari at the end of 2019 gave birth to hopes and expectations that the tendency will proceed in 2020 too, the newspaper notes. However, instead of strengthening, lari has started depreciation and already passed the mark of 2.9 GEL/USD, the article indicates.
The newspaper reminds that strengthening of lari in 2020 was predicted by analysts of TBC Research and Galt&Taggart.
Currently, TBC Research watches tendencies so far, while Galt&Taggart declares that “information in connection with fail of a winter tourist season and global uncertainty because of coronavirus epidemic in China, supposedly, cause negative expectations that really do not affect the exchange rate positively”.
In his turn, financier David Tsikaradze considers that lari exchange rate “was held artificially”. “Nothing changed in economy, when strengthening started, there was simply a New Year period, when demand for lari increases anyway”, he points.
“Expenses grew in absolutely all directions, especially bureaucratic”, “investments do not arrive, the country does not develop. Practically nothing is visible that could make us to think that we are on the path of improvement”, Tsikaradze declared to the newspaper (published on January 29).