IFC, a member of the World Bank Group, will provide Bank of Georgia with multiple US dollar and euro currency swaps over the next two years, enabling the bank to better manage its euro deposit base and provide a wider range of deposit products to customers.

The agreement is IFC’s first deposit hedging project in Georgia. The transaction will be implemented under IFC and Bank of Georgia’s existing International Swaps and Derivatives Association Master Agreement, the international legal documentation for the execution of risk management transactions, signed in May 2009.

The agreement is part of IFC’s strategy aimed at introducing new products to its clients in Europe and Central Asia to enhance risk management capacity.

Irakli Gilauri, CEO of Bank of Georgia, said: “This transaction gives Bank of Georgia a better tool for currency risk management and reduces the cost of hedging foreign exchange risk. It will enable us to hedge our foreign exchange risk for up to EUR30m.”

Thomas Lubeck, IFC regional head, Caucasus, said: “We are glad to expand cooperation with our long-term partner, Bank of Georgia. This innovative tool will support the bank, and it’s a perfect example of the high value-added services that we provide to our clients.”