Financial alliance: what does the memorandum of understanding between the NBG and the NBK give Georgia?

On 29 March 2025, the National Bank of Georgia (NBG) and the People's Bank of China (PBOC) entered into a Memorandum of Understanding with the aim of expanding and strengthening bilateral cooperation.
The agreement was signed by Natia Turnava, Governor of the National Bank of Georgia, and Pan Gongsheng, Governor of the People's Bank of China, during the visit of the NBG delegation to China. The delegation was headed by Natia Turnava. The Memorandum of Understanding (MoU) that was established serves to provide a framework for close cooperation, with the aim of addressing common challenges in the global financial environment, reducing systemic risks, improving trade and business relations between the two countries, and strengthening financial stability. During her visit to the NBK, Natia Turnava emphasised the importance of the growing cooperation in the financial sector between Georgia and the People's Republic of China. She expressed optimism that the active partnership between the two central banks will bring mutual benefits.
The common objective is to enhance the efficiency and interconnectivity of banking sectors. The Georgian financial market is to be rendered more attractive for Chinese banks and financial institutions. It is gratifying that our Chinese colleagues have demonstrated considerable interest and a willingness to cooperate more closely,' Natia Turnava stated.
The memorandum stipulates the framework for collaboration between the two central banks in key areas, including monetary policy, financial technology, payment systems and securities market development. The agreement provides for the exchange of information and experience in these areas.
Furthermore, as part of their cooperative endeavours, the NBG and NBK will undertake joint projects and strive to enhance banking services between the two nations. A key area within their mandate will be the development and modernisation of payment infrastructure, with a particular focus on strengthening interconnections between payment systems. The overarching objective of this initiative is to facilitate seamless, efficient, and secure international transactions.
As part of its official visit to China, the delegation of the National Bank of Georgia (NBG) visited the Chinese People's Association for Friendship with Foreign Countries and met with its Vice President, Jiang Jiang. The discussions focused on the consolidation of bilateral relations and the promotion of international cooperation across a range of domains. Both sides emphasised the historical ties and deepening economic relations between Georgia and China, underpinned by the existing free trade agreement between the two countries.
The Vice President of the Chinese People's Association for Friendship with Foreign Countries, Jiang Jiang, asserted that Georgia and China have historically maintained strong relations. However, with the recent surge in economic cooperation, as reflected in trade, investment, tourism and people-to-people exchanges, it is imperative that our financial sectors also match this expanding partnership.
Vice-President Jiang Jiang expressed readiness for further co-operation with the National Bank of Georgia in the furtherance of mutual interests.
The signing of the Memorandum of Understanding between the National Bank of Georgia (NBG) and the People's Bank of China (PBOC) has the potential to generate a number of strategic opportunities for Georgia. The People's Republic of China boasts a robust financial system and a wealth of experience in stabilising the economy during periods of crisis. The transfer of knowledge from PBOC to the NBG is expected to assist the NBG in the effective management of risks, particularly in the context of global financial turbulence. Georgia stands to benefit from China's expertise in modernising its monetary policy and in the stabilisation of inflationary processes, measures that have the potential to significantly bolster the country's macroeconomic stability. Furthermore, the deepening of cooperation with China, including the potential implementation of currency swap operations, has the capacity to significantly mitigate the volatility of the lari exchange rate, thereby reducing currency risks. The Memorandum is expected to promote investment growth and facilitate the operations of Chinese financial institutions in Georgia, thereby creating more favourable conditions for capital inflows from China. Chinese banking institutions will be well-positioned to play a more active role in lending for infrastructure and trade projects.
Georgia has already established a free trade agreement with China, and the new memorandum could facilitate the financing of transactions between Georgian and Chinese companies, thereby accelerating turnover and promoting trade. Chinese investment has the potential to facilitate the development of infrastructure, logistics corridors and energy facilities, and other strategic projects in Georgia.
The integration of Georgian and Chinese payment systems is expected to take place in a gradual manner. The modernisation of payment infrastructure and the integration of Chinese fintech solutions such as WeChat Pay and Alipay is expected to facilitate transactions between the two countries, thereby increasing convenience for tourists and businesses. It is noteworthy that a number of experts have observed that cooperation between Georgian and Chinese banking institutions will facilitate expedited international transactions. Georgian companies stand to benefit from more cost-effective and efficient payment mechanisms when engaging with Chinese partners. The potential incorporation of the digital yuan (e-CNY) into the Georgian financial system could stimulate the digital yuan market in Georgia and establish alternative settlement mechanisms, thereby reducing the country's reliance on the dollar and euro.
In consideration of the established correlation between Georgia's economic growth and the tourism industry, it can be deduced that the simplification of payment systems and financial services for Chinese citizens will serve to enhance Georgia's appeal as a tourist destination.
The signing of the memorandum between the National Bank of Georgia (NBG) and the People's Bank of China (PBOC) is not merely a formal step. Rather, it is a strategic agreement with the potential to exert a fundamental influence on the Georgian economy, financial sector and geopolitical position of the country in the long term. Historically, China has consistently demonstrated a propensity to support infrastructure and investment initiatives in countries with which it has established financial cooperation. This may help to reduce geopolitical risks for Georgia.
Elbrus Mamedov

SR-CENTER.INFO