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BTU researchers calculate that gold revaluation accounted for approximately 22% of the USD 613 million monthly increase in Georgia’s international reserves in August 2026. The National Bank of Georgia’s October review also shows foreign reserve accumulation alongside operations absorbing lari liquidity, making it essential to distinguish a stronger external buffer from an increase in freely available domestic money.

Key Takeaways

• BTU researchers calculate that USD 135 million, or 22.0%, of Georgia’s USD 613 million reserve increase in August 2026 came from gold revaluation; the remaining USD 478 million combines all other net effects.
• The National Bank of Georgia reports net foreign currency purchases of USD 555.6 million through its rules-based mechanism in August 2026, alongside increased use of liquidity-absorbing instruments, including a GEL 245 million rise in outstanding deposit certificates.
• BTU’s analytical assessment is that larger Georgian reserves primarily strengthen resilience to external financial shocks; reserve size alone determines neither the future exchange rate nor an individual company’s financing terms.

Georgia’s international reserves exceeded USD 8.1 billion in August. The National Bank of Georgia’s October 2026 Monthly Review describes the level as historically high. A headline of this kind can easily suggest that the country simply received an additional USD 613 million in one month and can now spend that much more. The underlying picture is more informative: foreign currency purchases, government foreign currency transactions, interest income and changes in the value of existing gold all contribute to the result.

Understanding the distinction matters beyond financial institutions. A Georgian importer needs foreign currency to buy goods, an exporter earns foreign revenue, and a domestic supplier may manufacture products sold in lari from imported inputs. External financial conditions reach these businesses through different channels. Reserve news becomes useful when readers understand what has increased and how the change relates to the business environment.

BTU’s principal finding is that August’s increase strengthened the external reserve buffer, but part of the increase came from a higher market valuation of existing assets. Parallel monetary operations show that the NBG was managing lari liquidity separately. Reading both developments together tells us considerably more than the record reserve headline alone.

What actually increased

International reserves are external reserve assets available to the central bank. Their importance lies in the additional room for action they provide when external financial difficulties arise. Different assets are expressed in a common reporting unit, in this case US dollars. Consequently, the reported total can change even when the physical quantity of a particular asset remains unchanged.

Gold offers the clearest explanation. If its international price rises, gold already held in reserves becomes more valuable. The accounts can show a larger dollar equivalent without any additional gold purchase. That is an economically meaningful change in asset value, but it is different from new dollars arriving in an account at the same moment.

The NBG reports that gold revaluation added USD 135 million to reserves in August. BTU researchers compared that amount with the total monthly increase of USD 613 million. Dividing 135 by 613 gives approximately 22.0%. Roughly twenty-two dollars of every hundred dollars of reserve growth therefore came from the higher value of gold. This proportion concerns the increase during one month, not gold’s share of the entire reserve portfolio.

Two parts of August reserve growth

Period: August 2026 versus July. Source: NBG October review, p. 13. 613 and 135 are issuer figures; 478 and percentage shares are BTU calculations. 478 does not mean cash inflows alone.

Subtracting USD 135 million from USD 613 million leaves USD 478 million. That remainder should not be presented as fresh cash inflows alone. It combines every other net change apart from the stated gold revaluation effect. Positive and negative influences offset one another within the total. The two-part decomposition is useful; labeling each remaining dollar as a specific incoming flow would go beyond the evidence.

The review lists government foreign currency receipts, reserve interest income and net NBG foreign currency purchases as positive influences. Government foreign currency spending, including debt servicing, worked in the opposite direction. The final stock changed after these movements and valuation effects. Businesses recognize the same basic logic: an ending account balance cannot be explained by adding receipts while ignoring payments made during the period.

Why purchases and reserve growth differ

The NBG’s net foreign currency purchases through its rules-based mechanism amounted to USD 555.6 million in August. This number describes transactions that actually occurred. By purchasing foreign currency from the market, the central bank changes the composition of its assets. However, the volume of those purchases and the change in total international reserves are different statistical measures.

The review’s monetary aggregates section contains another relevant figure. Net NBG foreign currency sales through internal government conversions amounted to USD 117.6 million. The difference between these two operations is USD 438 million. The NBG attributes an increase in net foreign assets of that amount to the specified operations. This is a separate calculation with a separate definition, not a complete decomposition of the USD 613 million increase in international reserves.

Three accurate figures can therefore be assembled into an inaccurate story. USD 555.6 million measures net market purchases; USD 438 million is the result of the named foreign currency operations; USD 613 million is the total monthly increase in international reserves. Artificially equating measures with different boundaries would erase other government transactions, income and valuation effects.

The straightforward reading is that the NBG bought foreign currency, gold appreciation helped raise reserve value, and government expenditure and other movements affected the final balance. A full reconciliation would require complete and consistently defined data for every component. The monthly review explains the main mechanisms without providing all of them in one exhaustive numerical bridge.

Why the NBG was also absorbing lari

Foreign currency purchases have another side. When a central bank buys dollars from a bank and supplies lari in exchange, it adds lari resources to the banking system. Banks can use those resources for settlement and other current needs. Readily available resources of this kind are called liquidity. Their quantity matters for short-term monetary conditions.

A central bank can enlarge its foreign currency buffer and absorb some of the additional domestic currency resources at the same time. The August review describes increased use of operations of this kind. Alongside three-month deposit certificates, the NBG issued one-month certificates. A bank purchasing a certificate places money with the central bank for a specified period; those funds are no longer freely available liquidity during that period.

New certificates totaling GEL 265 million were placed in August: GEL 65 million with a three-month maturity and GEL 200 million with a one-month maturity. Meanwhile, GEL 20 million of previously issued certificates matured. BTU researchers calculate the net increase as GEL 245 million, subtracting redemption from new placements. Outstanding certificates reached GEL 325 million at month-end. The net change is the relevant comparison because maturity returns funds to holders.

Two liquidity management instruments

Source: NBG October review, pp. 13 and 15; BTU arithmetic verification. Amounts describe instrument volumes; their sum is not total net cash absorption.

A second important step was the sale of Treasury securities owned by the NBG on the secondary market. The review reports GEL 1,128.8 million and states that the sales reduced the NBG’s share of the total Treasury portfolio to zero. A secondary market trades securities already issued. The government therefore did not automatically incur an equivalent amount of new debt through this operation: ownership of existing securities changed.

During the same month, new Treasury securities were also placed at government auctions, with a nominal value of GEL 180 million. Combining this figure with the NBG’s GEL 1,128.8 million sale and calling the total new government borrowing would be incorrect. One is new issuance; the other transfers previously issued securities to another holder. This distinction explains how a large financial market transaction can occur without generating an equivalent amount of new budget revenue.

Adding the net increase in deposit certificates to the stated volume of NBG Treasury sales gives GEL 1,373.8 million. That comparison illustrates the scale of the two instruments. It is not an estimate that exactly this much net liquidity was withdrawn: face values, transaction prices and other monetary movements must be considered separately. Nor can the sum be directly equated with dollar purchases, especially by comparing amounts denominated in different currencies.

Month-end is only one snapshot

Another detail strengthens the interpretation. At the end of August, reserve money, the central bank money base, was GEL 289.45 million lower than at the end of July, reaching approximately GEL 9.5 billion. Yet its monthly average increased by GEL 275.6 million. What initially looks contradictory reflects two different time measures.

The closing figure describes a particular day. The average reflects conditions throughout the month. Resources may remain elevated for much of a month before falling during its final days. A decline in the August closing balance therefore does not establish that lari resources were declining throughout August. Equally, growth in foreign reserves cannot explain every daily movement in reserve money.

The broader monetary aggregate M3 increased by GEL 1.4 billion during the same month. It includes currency outside banks and deposits, describing a different layer of money from the monetary base. The practical lesson is not to memorize abbreviations. The statement that “money increased” is incomplete until it identifies which measure, which period and which part of the financial system is meant.

What Georgian businesses can take from the change

BTU’s analytical assessment is that the most useful conclusion is to distinguish financial resilience from day-to-day operating conditions. Larger international reserves strengthen the capacity to respond to external shocks. A company still has its own revenue currency, payment schedule and cost structure. A larger national buffer does not automatically remove a particular firm’s currency mismatch.

For an importer, good reserve news is not a guarantee of the exchange rate available when a future payment falls due. For an exporter, higher reserves do not mean dollar earnings will necessarily convert into more lari. Both benefit from a more resilient environment, but contract pricing and currency arrangements still depend on their own business conditions. Reserves provide context for a decision rather than its sole foundation.

Knowing the contribution of gold revaluation raises another useful question: how would reserve value respond if asset prices moved differently? August’s increase is real in the accounting sense reported by the NBG, but the portion generated by appreciation remains exposed to subsequent market price changes. That observation does not diminish gold’s role. It distinguishes asset valuation from fresh financial flows.

The most important story in the October review is therefore more than a reserve stock exceeding USD 8.1 billion. The buffer increased through several mechanisms while the NBG was also managing lari liquidity. BTU’s calculation of gold revaluation’s 22% contribution makes the picture more precise: evaluating an improvement in financial conditions begins with understanding where the improvement came from and what it can realistically change.

Questions and Answers

Does 22% mean that gold makes up that share of reserves?

No. The 22.0% is the USD 135 million gold revaluation effect as a share of August’s USD 613 million reserve increase. Gold’s share of the total portfolio is a different measure.

Why do dollar purchases differ from reserve growth?

Purchases are one transaction channel. Government receipts and spending, interest income and asset revaluation also influence the final reserve balance.

Do Treasury sales mean the government borrowed more?

The NBG’s secondary-market sales transfer ownership of existing securities. Auctions issuing new Treasury securities are a separate operation.

Does reserve growth guarantee a stronger lari?

The reserve figure alone does not establish the exchange rate’s future direction. Reserves support financial resilience, while exchange rates also respond to market supply, demand and other conditions.