In a policy shift announced in Tbilisi on Wednesday, Georgia’s National Bank announced it intends to boost the Chinese renminbi (yuan) portion of its foreign‑exchange reserves to about 15 percent over the near term. The move, aimed at diversifying national holdings and reducing exposure to U.S. dollar volatility, follows the central bank’s recent procurement of monetary gold and other currencies.
Governor Natia Turnava, who led the announcement, said that Asian markets, including China’s capital market, could behave differently from Western markets during periods of turbulence and that such differences could strengthen the resilience of Georgia’s reserves.
"The move would diversify the country’s holdings and reduce exposure to market volatility," said Turnava.
Turnava explained that currently, Georgia’s reserves are predominantly denominated in U.S. dollars, making the economy vulnerable to dollar‑strengthening pressure and potential liquidity risks. By increasing the yuan stake, the banker believes the country can hedge against such risks.
The plan to raise the yuan share is part of a broader diversification policy that has seen the central bank accumulated strategic assets and expanded its portfolio beyond a single currency. The bank stated it has also acquired monetary gold to serve as a long‑term store of value.
According to Turnava, the diversification strategy is designed to create a more balanced reserve profile, aiming to mitigate the impact of any single market’s downturn on the country’s foreign‑exchange posture.
Experts at the National Bank noted that the yuan’s growing role in global trade, especially in East Asian economies, could make it a more attractive reserve asset during periods of broad‑based instability in Western financial centres.
While the announcement has received positive coverage from the central bank’s officials, some economists caution that the currency risk associated with the yuan may fluctuate, and that investment in non‑dollar reserves could carry its own flows of uncertainty.
In addition to the yuan, other currencies have already been incorporated into Georgia’s reserves, with the central bank indicating it maintains a mix that includes European and Asian currencies to diversify exposure further.
The policy shift reflects Georgia’s intentions to recalibrate its reserve structure, embrace multiple currencies, and safeguard the nation’s economic stability as it pursues deeper ties with both Asian and Western partners.
