Apr 3, 2019

Likely no NBG interventions on FX market in March

Quick Update

  • NBG continued to refill its FX reserves in February 2019 with 50 mln USD purchased on interbank FX market via auctions and additional 51.3 mln USD via GEL call options – in total up to 10% of same month GDP. NBG have not intervened on the interbank FX market in March. The USD/GEL exchange rate crossed the 20 day moving average in March for a few days only*. The information if call options were exercised in March will be available by the end of April. Commercial Banks’ currently hold GEL call options with the amount of GEL 150 mln to be exercised in April (around 56 mln USD). Sharp fiscal spending as well as stronger lending in GEL compared to FX in February and possibly in March could have eased appreciation pressures on FX market in March.
  • As of the end of February NBG’s gross international reserves stood at 3.5 bn USD up by 15.7% YoY. Higher Gross reserves is mainly explained by the increased FX reserves requirements for commercial banks. As for the net international reserves, estimated NIR went up by 12.2% YoY. NIR exceeds the lower threshold for June 2019 as defined at 1.456 bn USD in the agreement with the IMF by around 200 mln USD.