Central Bank Independence in Transition Economies

W. Maliszewski 

CASE Foundation 

40

Presidents only. All whole Board may be dismissed if the members do not agree with 

the monetary and credit policy set by the Parliament (Art. 28, also see section 5B 

below) Salaries of the Board's members are set by the Parliament (Art. 9 as amended 

in 1996). President of the Republic and the Parliament or Government member may 

not be a member of the Bank's Board (Art. 10). The Bank is independent in deciding 

on its finances and incurs its expenses for account of its profits (Art. 3.2). 

5B. Objectives, Formulation of Monetary Policy and Relations with other 

State Institutions  

Main objectives of the Bank are protecting the purchasing power of the national 

currency, price stability and stability of the money and credit system in Georgia (Art. 

2). Other State bodies must not interfere in Bank's activity as specified by the law (Art. 

3.1). In the law of 1995 the Bank determines the monetary and credit policy. By the 

amendment of 1996 the Parliament's acceptance of the guidelines for policy submitted 

by the Bank is required (Art. 28). The Parliament may change the guidelines and the 

Bank is obliged to subordinate to its decision. In case of disagreement, all Board's 

members are dismissed. The Bank submits to the Parliament a yearly report on its 

finances and economic situation in the Republic, as well as monthly reports on its 

balance (Art. 68). The NBG acts as the advisor to the President and the Government in 

issues related to its activity (Art. 52.2). In particular, the Government receives advise 

on the annual budget proposal (Art. 52.3).