| Banks Are Limiting Ruble Exchange in Georgia |
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22/02/2010 12:31 (719 Day 09:36 minutes ago) | |||||
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The FINANCIAL -- The majority of Georgian commercial banks are limiting cash exchange of the Russian Ruble. Banks are saying that the “Ruble is not a profitable currency”.
There is low demand for the Russian national currency among Georgian customers since the national currency GEL, USD and EUR became dominant. However Russia still remains the leader among countries transferring the largest amounts of USD and EUR to Georgia, according to National Bank of Georgia . Almost 100 percent of transactions are made via money transferring companies like Western Union.
Money sent by Georgian immigrants from Russia in 2010 is 6 times more than from the USA. In January 2010 the volume of money transfers from abroad constituted 56.0 million USD, which is 5.2 million USD or 10.3 percent more than the same amount for January 2009. During this period the volume of remittances significantly grew for Russia (by 2.0 million) and Greece (by 1.1 million).
88.4 percent of total money transfers from abroad fall on those seven big donor countries, from which the volume of such transfers exceeded 1 million USD in January. In January 2009 the share of these 7 countries constituted 87.9 percent of the total volume of money transfers.
According to NBG, in January 2010 5.2 million USD were transferred from Georgia, compared to the 5.5 million USD in January 2009.
The Russian ruble strengthened to a 13-month high against a basket of the EUR and USD, reaching 0.03 USD per 1 RBL. This change does not influence Georgians as they don’t believe the RBL is a stable currency for saving. The FINANCIAL’s study showed that 80% of depositors are saving in USD.
Tbilisi resident Ann Tsereteli, 25, failed to convert 10,000 RBL into GEL last week. “For my work in Russia I was paid in RBL. I did not buy USD in MOSCOW as the rate of USD there is very low. In Georgia I was surprised at how banks are refusing to convert RBL into GEL,” Tsereteli says.
“At TBC Bank the exchange of RBL in to cash is not possible. You can do it through a bank account only. We do not offer exchange of cash because of an absence of demand, which makes such operations unprofitable,” David Kiguradze, Head of the Treasury and Global Markets Department of TBC Bank , told The FINANCIAL.
TBC Bank exchanges approximately 10 million RBL monthly.
“Our customers are most frequently exchanging USD, EUR, GBP (Pound Sterling) and CHF (Swiss Franc). As demand exists only for the exchange of different payments of RBL the exchange of cash becomes unprofitable for our bank,” Kiguradze says.
VTB Bank Georgia, a subsidiary of VTB Bank OJSC, the second largest bank in Russia, offers cash exchange of different foreign currencies, except the RBL.
“The exchange of Russian cash must be negotiated,” says Lado Mestiashvili, Head of the Treasury at VTB Bank Georgia.
“Most frequently Georgians exchange the currencies: USD, EUR, RUB, GBP, CHF, CAD (Canadian Dollar) and JPY (Japanese Yen),” Mestiashvili notes.
Bank of Georgia and Bank Republic, SocGen Group, did not suspend cash exchange of the Russian Ruble.
Presently the exchange rate of 1 RBL at Bank of Georgia is GEL 0.0490.
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