ADVERTISEMENT
  • News
  • New York
  • Technology
  • Culture
  • Entertainment
  • Sport
  • More
    • Politics
    • Lifestyle
    • TV
    • Games
Tuesday, June 24, 2025
  • Login
No Result
View All Result
NEWSLETTER
FINCHANNEL
  • Home
  • Business
    • BANKS
      • GeoBanks
    • Finance
    • Insurance
    • Markets
    • Pharmacy
    • Press Releases
    • RealEstate
    • RealEstate
    • Finance
    • Insurance
    • Banks
      • GeoBanks
    • Markets
    • Press Releases
    • Personal Finance
  • World
    • Americas
    • Europe
    • Georgia
      • Media
    • Ukraine
    • Europe
    • Georgia
      • Media
    • Ukraine
    • Americas
    • UK local news
  • Travel
    • Hotels in Georgia
    • Tours in Georgia
  • Videos
    • Promos
    • Soundslides
    • TheClinics
    • TheHoteliers
    • TheUniversities
    • TheHoteliers
    • TheClinics
    • TheUniversities
    • BestWorkplaces
    • Soundslides
    • Promos
    • Banking Forum
      • Promos
      • Soundslides
      • TheClinics
      • TheHoteliers
      • TheUniversities
  • Opinion
    • Editorial
      • Analysis
      • GORBI
      • OP-ED
      • VISA Editorial
    • Analysis
    • Gorbi
    • Book reviews
  • Tech
  • Interview
  • People
    • lifestyle
    • Health & Beauty
      • Coronavirus
    • LifeStyle
    • Employment
      • MyCareer
    • Education
    • Media
    • Celebrities
  • Oil&Auto
    • Auto
    • Energy
  • EN
    • EN
    • GE
  • Home
  • Business
    • BANKS
      • GeoBanks
    • Finance
    • Insurance
    • Markets
    • Pharmacy
    • Press Releases
    • RealEstate
    • RealEstate
    • Finance
    • Insurance
    • Banks
      • GeoBanks
    • Markets
    • Press Releases
    • Personal Finance
  • World
    • Americas
    • Europe
    • Georgia
      • Media
    • Ukraine
    • Europe
    • Georgia
      • Media
    • Ukraine
    • Americas
    • UK local news
  • Travel
    • Hotels in Georgia
    • Tours in Georgia
  • Videos
    • Promos
    • Soundslides
    • TheClinics
    • TheHoteliers
    • TheUniversities
    • TheHoteliers
    • TheClinics
    • TheUniversities
    • BestWorkplaces
    • Soundslides
    • Promos
    • Banking Forum
      • Promos
      • Soundslides
      • TheClinics
      • TheHoteliers
      • TheUniversities
  • Opinion
    • Editorial
      • Analysis
      • GORBI
      • OP-ED
      • VISA Editorial
    • Analysis
    • Gorbi
    • Book reviews
  • Tech
  • Interview
  • People
    • lifestyle
    • Health & Beauty
      • Coronavirus
    • LifeStyle
    • Employment
      • MyCareer
    • Education
    • Media
    • Celebrities
  • Oil&Auto
    • Auto
    • Energy
  • EN
    • EN
    • GE
No Result
View All Result
FINCHANNEL
No Result
View All Result
Home Georgia

Foreign Currency Savings no Longer Profitable at Georgian Commercial Banks 

Madona Gasanova by Madona Gasanova
July 25, 2016
in Georgia
Reading Time: 4 mins read
9
A A
0
Share on FacebookShare on Twitter

The FINANCIAL — Against the background of the high dollarization rate in the Georgian economy commercial banks have started reducing interest rates on deposits in the national currency. The average interest rate on deposits in the national currency, which stood at 11.9% as of November 2015, has dropped to 10.4% as of May 2016. As for foreign currency, the interest rate amounted to 4.1% as of May 2016, down from 4.4% as of November 2015. With 13% Finca Bank Georgia offers the most attractive terms for depositors keeping savings in the national currency. 7% and 4.50% on deposits in USD and EUR respectively, are the highest rates on the market, and offered by Progress Bank.

According to National Bank of Georgia the total volume of non-bank deposits in the country’s banking sector decreased by 6.5 percent (exchange rate effect excluded volume of deposits decreased by 5.0 percent), or by GEL 939.3 million, compared to 1 May, 2016, and constituted GEL 13.5 billion as of 1 June, 2016. In May, the volume of term deposits decreased by GEL 312.6 million (4.0 percent; exchange rate effect excluded volume of term deposits increased by 1.1 percent). Demand deposits decreased by GEL 626.7 million (9.5 percent; exchange rate effect excluded volume of demand deposits decreased by 7.4 percent).

The larization ratio of total non-bank deposits constituted 33.07 percent as of 1 June, 2016. It increased by 2.55 percentage points (or by 1.68 percentage point exchange rate effect excluded) compared to 1 May, 2016.

RelatedPosts

Event Planning Company Party Lab Expands with Party Accessories Store

Customer-Centric Approach: How PSP Leads Georgian Pharmaceutical Market

Boxette Georgia Launches New Pickup and Drop-off Points Across Country

Why Tbilisi Real Estate Investing is Buzzing Right Now

The annual average weighted interest rate on term deposits constituted 5.3 percent. In particular, the interest rate for national currency denominated deposits was 10.4 percent and the interest rate for foreign currency denominated deposits – 4.1 percent.

The share of the US Dollar in the total volume of foreign currency denominated deposits equals 81.4 percent and the share of the Euro equals 15.7 percent.

According to American specialists, 60-70% of USD is in circulation or being kept in deposits outside of the USA, being a source of dollarization in recipient countries. A high dollarization rate causes problems in the economy including an unstable economic environment and an increased currency risk. The high rate of dollarization has always been a challenge for the Georgian economy. Devaluation has further strengthened the problem. Offering attractive interest rates on savings in the national currency has been considered one of the main stimulators for encouraging citizens to save money in the national currency. In line with devaluation commercial banks started increasing rates on deposits denominated in the national currency. For example, if for May 2015 the average rate on the market amounted to 7.2%, for November 2015 it reached 11.9%. As for savings denominated in a foreign currency the trend has been characterized with a downgrading trend. The ratio dropped to 4.4% for November 2015, down from 4.9% as of May 2015.

Banking deposits have frequently been considered to be one of the most safe and profitable sources of investment among Georgians. Meanwhile, gaining on average USD 350 per USD 10,000 for the end of twelve months, which makes over USD 29 per month, contributes to the drop in popularity of this source of investment.

While interest rates are almost equal in nearly every commercial bank operating in Georgia, there still can be found banks that try to compete with higher rates. The FINANCIAL has studied average interest rates on deposits denominated in national as well as foreign currencies (USD and EUR). We compared the rates of 12 Georgian banks. The figures are related to term deposits with twelve month terms and considering a receiving rate for the end of the term.

See also  Why Tbilisi Real Estate Investing is Buzzing Right Now

With 13% APY, Finca Bank Georgia offers the highest rate for depositors keeping savings in the national currency. Finca Bank Georgia is followed by: Progress Bank – 12.50%; Liberty Bank and Halyk Bank – 12%; BasisBank – 11.25%; Bank Republic, SocGen Group – 9.50%; TeraBank – 9.25%; TBC Bank, Bank of Georgia, VTB Bank and ProCredit Bank – 9%; and, Cartu Bank – 7.5%.

With 7% APY, Progress Bank has the highest rate on term deposit denominated in USD. The Bank is followed by: Finca Bank Georgia and Halyk Bank – 5%; Liberty Bank, TeraBank, BasisBank and Cartu Bank – 4%; VTB Bank – 3.75%; TBC Bank, Bank of Georgia, Bank Republic, ProCredit Bank – 3.50%.

EUR savers have the most attractive offer by Progress Bank with 4.50%. It is followed by: Finca Bank Georgia – 3.50%; Halyk Bank – 3%; TeraBank, BasisBank, Cartu Bank – 2.50%; VTB Bank – 2.25%; TBC Bank, Bank of Georgia, ProCredit Bank – 2%; Liberty Bank – 1.50%; and, Bank Republic – 1%.

According to Deposits.org, online database of deposit markets around the world, the list of the highest deposit interest rates around the world in national currencies is as follows: Argentina – 28.50%; Ukraine – 22.50%; Uzbekistan – 20%; Azerbaijan – 15.2%; Mongolia – 15.10%; and Iran – 15%.

The lowest interest rates on deposits are in: Slovakia – 0.01%; Lichtenstein – 0.02%; Spain and the Czech Republic – 0.05%.

In 2016 the Bank of Japan launched negative interest rates, which is when savers have to pay banks for holding their money and central banks penalise banks for depositing cash with them.

The central bank will charge banks 0.1% for parking additional reserves with the BOJ to encourage banks to lend and prompt businesses and savers to spend and invest.

In recent history, the Swedes were the first to go negative. Between July 2009 and September 2010 Sweden cut the deposit rate to -0.25% in an attempt to fend off the deep recession that followed the 2008 banking crash and global financial crisis. It reintroduced them in July 2014 and the deposit rate is currently -1.25%.

“While high interest can be the result of economic growth in a country, very high interest can be because of inflation. The real rates consumers are receiving after the inflation number is deducted are important because high rates can sometimes not compensate an investor because of the inflation rate. How it affects the economy is that when deposit rates are high it compensates savers but since loans would be higher than deposit rates it penalizes borrowers by making borrowing costs high,” said Peter Fiasco, Founder and Director of Deposits.org.

“Similar to most countries in the world, the factors that influence deposit rates include the influence of the monetary policy of the central bank, such as the Federal Reserve (independent central bank of the United States). When an economy has high inflation it can increase interest rates to keep it under control,” said Fiasco.

“Banks in general are dependent on the interest rates set by the central bank. They are also influenced by funding and liquidity requirements, regulations, competition for deposits and loan to deposit ratio profiles,” Fiasco told The FINANCIAL.

 

Related Posts

MARIAM DAVITASHVILI, Founder and Director of Party Lab
Business

Event Planning Company Party Lab Expands with Party Accessories Store

by Madona Gasanova
June 14, 2025
0

Party Lab, the Georgian event planning company that has captured the hearts of many since its launch two years ago,...

Read more
MAMUKA BREGVADZE, Administrative Director of PSP

Customer-Centric Approach: How PSP Leads Georgian Pharmaceutical Market

June 14, 2025
MIKHEIL MURTSKHVALADZE, Founder of Boxette Georgia

Boxette Georgia Launches New Pickup and Drop-off Points Across Country

June 14, 2025
Why Tbilisi Real Estate Investing is Buzzing Right Now

Why Tbilisi Real Estate Investing is Buzzing Right Now

June 3, 2025

Discussion about this post

  • Trending
  • Comments
  • Latest
Teaching porn literacy

A sizable percentage of internet porn users, roughly 40% are women

January 17, 2024
Ampersand wins £22m five-year contract at London Zoo

Ampersand wins £22m five-year contract at London Zoo

June 25, 2012
EasyJet to fly to London from Stockholm Arlanda

The London Diplomatic List, Addresses, Contacts & Working Hours

January 23, 2023
Matthew H. Fleeger Drives Strategic Growth at Gulf Coast Western Through Technology Integration

Matthew H. Fleeger Drives Strategic Growth at Gulf Coast Western Through Technology Integration

June 19, 2025
Teaching porn literacy

Teaching porn literacy

January 17, 2024
Fortifying Your Finances: Essential Tips for Protecting Your Assets

Fortifying Your Finances: Essential Tips for Protecting Your Assets

June 24, 2025
Charged With Retail Theft? What to Know Before Court

Charged With Retail Theft? What to Know Before Court

June 24, 2025
Jewish General Hospital, Montreal is the first hospitals in the world to fully implement EIAS across all surgical disciplines

Jewish General Hospital, Montreal is the first hospitals in the world to fully implement EIAS across all surgical disciplines

June 24, 2025
Survey: Majority of CFOs prioritizing ESG investment

The CFO’s Five Hidden Cyber-Cost Centers (and How to Shrink Them)

June 24, 2025
President of Ukraine. Stop Russia

Ukrainian President to make first visit to Council of Europe in Strasbourg amid escalating war in Ukraine

June 23, 2025
ADVERTISEMENT

Popular Last 24h

  • Ampersand wins £22m five-year contract at London Zoo

    Ampersand wins £22m five-year contract at London Zoo

    3740 shares
    Share 1496 Tweet 935
  • A sizable percentage of internet porn users, roughly 40% are women

    340 shares
    Share 136 Tweet 85
  • Jewish General Hospital, Montreal is the first hospitals in the world to fully implement EIAS across all surgical disciplines

    25 shares
    Share 10 Tweet 6
  • The CFO’s Five Hidden Cyber-Cost Centers (and How to Shrink Them)

    22 shares
    Share 9 Tweet 6
  • Teaching porn literacy

    168 shares
    Share 67 Tweet 42
  • Leon Botstein’s Five-Decade Transformation at Bard College

    358 shares
    Share 143 Tweet 90
  • The London Diplomatic List, Addresses, Contacts & Working Hours

    3190 shares
    Share 1276 Tweet 798

LATEST POSTS

Fortifying Your Finances: Essential Tips for Protecting Your Assets

Fortifying Your Finances: Essential Tips for Protecting Your Assets

June 24, 2025
Charged With Retail Theft? What to Know Before Court

Charged With Retail Theft? What to Know Before Court

June 24, 2025
Jewish General Hospital, Montreal is the first hospitals in the world to fully implement EIAS across all surgical disciplines

Jewish General Hospital, Montreal is the first hospitals in the world to fully implement EIAS across all surgical disciplines

June 24, 2025
Survey: Majority of CFOs prioritizing ESG investment

The CFO’s Five Hidden Cyber-Cost Centers (and How to Shrink Them)

June 24, 2025
President of Ukraine. Stop Russia

Ukrainian President to make first visit to Council of Europe in Strasbourg amid escalating war in Ukraine

June 23, 2025
Energy Management in Facilities: Tools for Calculating Efficiency

Energy Management in Facilities: Tools for Calculating Efficiency

June 23, 2025
Levi Pettit Launches Dornick Wealth Management With a Personalized Approach to Client Relationships

Levi Pettit Launches Dornick Wealth Management With a Personalized Approach to Client Relationships

June 23, 2025
Osman Gunes Cizmeci on Apple’s Liquid Glass: Beautiful, But at What Cost?

Osman Gunes Cizmeci on Apple’s Liquid Glass: Beautiful, But at What Cost?

June 23, 2025
In the U.S. and abroad, more young adults are living with their parents

Why More Adults Are Reconsidering Old Habits in 2025

June 23, 2025
CityBlue Hotels opens its first Beach Property in Kenya

CityBlue Hotels opens its first Beach Property in Kenya

June 19, 2025

LATESTBUSINESS

Fortifying Your Finances: Essential Tips for Protecting Your Assets

Fortifying Your Finances: Essential Tips for Protecting Your Assets

by Madona Gasanova
June 24, 2025
0

Valor Hospitality Partners announces two significant deals in West Africa,

Valor Hospitality Partners announces two significant deals in West Africa,

by Madona Gasanova
June 19, 2025
0

Markets will drop quickly if US enters Israel-Iran conflict: deVere CEO

Markets will drop quickly if US enters Israel-Iran conflict: deVere CEO

by Madona Gasanova
June 19, 2025
0

Matthew H. Fleeger Drives Strategic Growth at Gulf Coast Western Through Technology Integration

Matthew H. Fleeger Drives Strategic Growth at Gulf Coast Western Through Technology Integration

by Madona Gasanova
June 19, 2025
0

Iconiq 777 Hosts Pathways to Apprenticeship Awards Ceremony in Newark

Iconiq 777 Hosts Pathways to Apprenticeship Awards Ceremony in Newark

by Madona Gasanova
June 17, 2025
0

Tips for Remodeling on a Budget

Tips for Remodeling on a Budget

by Madona Gasanova
June 17, 2025
0

 ‘Why Did My Car Insurance Go Up for No Reason?’

Insurers boost private assets allocations as capital increases

by Madona Gasanova
June 17, 2025
0

Elite Lauches in Lebanon

U.S. Counts 1,873 Listed Billion-Dollar Companies, More Than the Next Eight Economies Combined

by Madona Gasanova
June 17, 2025
0

GET IN TOUCH

Submit guest post/Letters to the Editor:

editor (at) finchannel.com

Sales & Marketing: (+995 558) 03 03 03 Email: marketing (at) finchannel.com

Whatsup: (+995 599) 96 52 52

Georgia:

(+995 599) 96 52 52 Email: editor (@) finchannel.com

Postal address: 17 Mtskheta str. Tbilisi, Georgia 0179 The FINANCIAL

RESOURCE

  • Work at the FINANCIAL
  • ePaper
  • Advertise in The FINANCIAL
  • Access ePaper
  • Guest posts
  • Contributed articles
  • AmericanStockNews
  • Coupon Codes
  • GLOSSY MAG
American Culture Center
ACC Partner

GUIDEBOOK

  • Meet our team
  • Invest in Georgia
  • Become contributor
  • Archive

FOLLOW US

  • Facebook
  • Twitter
  • Google+
  • Youtube
No Result
View All Result
  • Home
  • Business
    • BANKS
      • GeoBanks
    • Finance
    • Insurance
    • Markets
    • Pharmacy
    • Press Releases
    • RealEstate
    • RealEstate
    • Finance
    • Insurance
    • Banks
      • GeoBanks
    • Markets
    • Press Releases
    • Personal Finance
  • World
    • Americas
    • Europe
    • Georgia
      • Media
    • Ukraine
    • Europe
    • Georgia
      • Media
    • Ukraine
    • Americas
    • UK local news
  • Travel
    • Hotels in Georgia
    • Tours in Georgia
  • Videos
    • Promos
    • Soundslides
    • TheClinics
    • TheHoteliers
    • TheUniversities
    • TheHoteliers
    • TheClinics
    • TheUniversities
    • BestWorkplaces
    • Soundslides
    • Promos
    • Banking Forum
      • Promos
      • Soundslides
      • TheClinics
      • TheHoteliers
      • TheUniversities
  • Opinion
    • Editorial
      • Analysis
      • GORBI
      • OP-ED
      • VISA Editorial
    • Analysis
    • Gorbi
    • Book reviews
  • Tech
  • Interview
  • People
    • lifestyle
    • Health & Beauty
      • Coronavirus
    • LifeStyle
    • Employment
      • MyCareer
    • Education
    • Media
    • Celebrities
  • Oil&Auto
    • Auto
    • Energy
  • EN
    • EN
    • GE

© 2025 Intelligence Group llc

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In

Add New Playlist

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.