Tbilisi (GBC) - The International Monetary Fund (IMF) has assessed Georgia’s international reserves—now exceeding $7 billion-as adequate for coping with moderate external stress scenarios, noting that sustained accumulation by the National Bank of Georgia (NBG) has materially strengthened financial stability and market confidence. According to the study, higher reserve buffers helped support the successful refinancing of Eurobonds in early 2026 and contributed to the lari’s stability despite external shocks, including rising energy prices linked to geopolitical tensions.
The IMF highlights that stronger reserve positions have improved perceptions of macroeconomic resilience, reducing sovereign risk and supporting lower financing costs. The report also links reserve accumulation to structural benefits, including reduced private-sector dollarization and improved capacity for foreign exchange interventions aimed at smoothing excessive volatility in shallow FX markets.
Beyond current adequacy levels, the IMF estimates that Georgia’s optimal reserve range could be higher—around 145–150% of the IMF’s ARA metric-given country-specific vulnerabilities. It argues that additional reserves act as a form of self-insurance, offering broader benefits than traditional benchmarks capture, particularly in emerging markets exposed to capital flow volatility and external shocks.
The Fund also notes that continued opportunistic accumulation remains appropriate under current conditions of elevated global uncertainty. It considers the NBG’s price-based FX intervention framework broadly consistent with reserve-building objectives, allowing flexibility in exchange rate adjustment while gradually strengthening buffers through continued net purchases, which reached $632.9 million in May alone.
