Georgia Government Bond Yield Curve

FAQ

• What factors influence changes in the Georgia yield curve?

  
  The Georgia yield curve is influenced by decisions of the National Bank of Georgia, inflation, movements in GEL, the economic growth outlook, the fiscal position, and public debt dynamics. External influences include global interest rates, economic conditions in Georgia’s major trading partners, tourism and foreign-currency inflows, regional risks, and demand for Georgian government bonds.

• How to interpret various yield curve slope shapes in the context of economic expectations?

  
  The yield curve shape serves as a key indicator of market expectations regarding future economic growth and monetary policy. Four primary shapes are identified:
  

  • A normal curve signals expectations of steady GDP growth, moderate inflation, and a neutral or accommodative central bank policy in the future. Long-term rates exceed short-term rates as investors demand a risk premium for holding long-dated assets.
  • An inverted curve is a classic leading indicator of recession: the market prices in an anticipated aggressive cut in the policy rate by the regulator in response to expected economic slowdown or crisis, causing short-term rates to exceed long-term rates.
  • A flat curve indicates uncertainty or a transitional phase between expansion and contraction, or expectations of a regulatory pause following a rate-hiking cycle. The spread between long-term and short-term rates becomes minimal.
  • A humped curve points to expectations of temporary policy tightening or an inflation spike in the medium term, followed by a return to low rates and stability in the long term. Rates at the mid-point of the curve are higher than those at the short and long ends.

• Which yield curve tenor spreads best reflect macroeconomic expectations in Georgia?

  
  For inflation forecasting, maturities must be matched to the forecast horizon (e.g., the 5Y–1Y spread reflects five-year-ahead inflation expectations). For economic activity forecasting, the optimal measure is the spread between the long-term rate (typically 10 years) and the short-term rate. In the absence of standard tenors in a country's yield curve, this principle is adapted by using the difference between the longest and shortest available curve points. Since all major spreads move synchronously, substituting one for another does not alter the overall picture.

• What are the key features of the short and long ends of the curve within its available tenor range?

  
  The curve spans maturities from 1 day to 12 years and comprises 20 points.
  

  • The short segment (1 day–1 year) has a high tenor density, allowing the market response to regulatory actions to be tracked in detail.
  • The medium segment (2–7 years) reflects expectations regarding the economic cycle over the medium term.
  • The long segment (8–12 years) is shaped by inflation expectations and the risk premium. The absence of tenors beyond 15 years limits the analysis of ultra-long-term structural trends.

• How is sovereign credit risk reflected in the government bond yield curve?

  
  Sovereign credit risk is reflected in the yield curve through the premium investors require for uncertainty regarding the government’s ability to meet its debt obligations. An increase in perceived risk may lead to higher yields and an upward shift in the curve. Where concerns are concentrated over a particular time horizon, the corresponding segments of the curve may move more significantly. The premium can be approximated using the spread between government bond yields and the yields on maturity-matched securities issued by a more creditworthy sovereign.

• Which government body is responsible for issuing Georgian government securities and managing the country’s debt?

  
  Georgia’s government treasury bills and bonds are issued by the Ministry of Finance of Georgia. The Ministry develops the public debt management strategy and determines the domestic borrowing programme and the terms of debt instruments. The National Bank of Georgia (NBG) conducts auctions and performs agency functions in the domestic market. The yields on securities issued by the Ministry of Finance are used to construct the Georgian government bond yield curve and reflect the cost of government borrowing at the corresponding maturities.

• Can the yield curve serve as a reference point for assessing corporate bonds?

  
  The yield curve can be used as a reference when assessing the fair yield of a corporate bond. The corresponding point on the curve indicates the base yield on government debt instruments at a comparable maturity, while the corporate bond yield includes a premium for additional risks. This premium may reflect the issuer’s financial position, the likelihood of meeting its obligations, the liquidity of the issue, and other relevant features. The difference between the two yields represents the additional compensation investors require relative to government securities.

• How does liquidity in the government bond market affect the quality of the yield curve?

  
  The higher the level of trading activity, the more reliably the yield curve reflects yields across different maturities. A sufficient number of actively traded issues, frequent transactions, and current market quotations improve the accuracy of individual points on the curve, making it smoother and more stable. When trading is infrequent and few securities are actively quoted, some values may be based on stale or isolated observations and may noticeably distort the shape of the curve.

• How can changes in the yield curve be tracked over time?

  
  When the page is opened, the chart displays the latest yield curve values together with data recorded approximately one month earlier. Other observation dates can be added through the “Add date” field. A maximum of 10 dates can be displayed on the same chart. The “Show dynamics” tool is designed to illustrate the movement of the yield curve over the selected period.

• When are new Georgia yield curve values published?

  
  The curve values are published daily on business days for the previous trading day. For example, data for May 6, 2026, is published on May 7, 2026.