Money transfers up 25.8% y/y in August 2020
In August 2020, money transfers increased 25.8% y/y to US$ 184.2mn, after growing 22.1% y/y in the previous month, according to NBG. From major remitting countries, money transfers increased strongly from Italy (+35.9% y/y, 15.2% of total), USA (+45.8% y/y, 12.0% of total) and Greece (+40.1% y/y, 11.2% of total). Meanwhile, remittances declined from Russia (-1.5% y/y, 19.0% of total). Overall, in 8M20 money transfers were up 3.2% y/y to US$ 1.1bn.
Trade deficit down 27.1% y/y in August 2020
In August 2020, trade deficit narrowed by 27.1% y/y to US$ 350.8mn according to Geostat’s preliminary figures as exports decreased by 7.5% y/y to US$ 292.4mn and imports fell by 19.3% y/y to US$ 643.3mn. In 8M20, trade deficit was down 19.3% y/y to US$ 2.9bn as exports decreased by 14.7% y/y and imports were down 17.5% y/y. Detailed foreign trade statistics will be available on September 21, 2020.
NBG kept its policy rate unchanged at 8.0%
At its meeting on 16 September 2020, NBG’s monetary policy committee decided to keep its policy rate unchanged at 8.0%. Based on NBG’s forecast, the downward trend of inflation will continue through 1H21. According to NBG, expected change in inflation is largely driven by weak demand. However, the committee took into consideration the risks of inflation expectation associated with the increased volatility in FX markets and the potential supply-side risks. The next committee meeting is scheduled for 28 October 2020.
NBG sold US$ 40mn
On 16 September 2020, the NBG intervened on the FX market and sold US$ 40mn to limit GEL volatility. This was 13th FX intervention YTD for a total sale of US$ 409.7mn through FX auctions.
