Notes to Consolidated Financial Statements continued Thousands of Georgian Lari 27. Risk Management continued Market risk continued Sensitivity of other Increase in basisSensitivity of net comprehensive points interest income income Currency 2016 2016 2016 GEL 206 261 (1,758) EUR 1 1 – US$ 3 69 – Sensitivity of other Decrease in basisSensitivity of net comprehensive points interest income income Currency 2016 2016 2016 GEL 206 (261) 1,758 EUR 1 (1) – US$ 3 (69) – Currency risk Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. The Management Board has set limits on positions by currency based on the NBG regulations. Positions are monitored daily. The tables below indicate the currencies to which the Group had significant exposure at 31 December 2018 on its monetary assets and liabilities. The analysis calculates the effect of a reasonably possible movement of the currency rate against the Georgian Lari, with all other variables held constant on the income statement (due to the fair value of currency sensitive non-trading monetary assets and liabilities). The reasonably possible movement of the currency rate against the Georgian Lari is calculated as a standard deviation of daily changes in exchange rates over the 12 months. A negative amount in the table reflects a potential net reduction in income statement or equity, while a positive amount reflects a net potential increase. During the year ended 31 December 2018, year ended 31 December 2017 and year ended 31 December 2016, sensitivity analysis did not reveal any significant potential effect on the Group’s equity. 2018 2017 2016 Change in Effect Change in Effect Change in Effect currency on profit currency on profit currency on profit Currency rate in % before tax rate in % before tax rate in % before tax EUR 9.9% 85 12.0% (2,487) 11.6% (3,336) US$ 7.1% 14,343 8.9% 5,758 9.3% 3,507 Prepayment risk Prepayment risk is the risk that the Group will incur a financial loss because its customers and counterparties repay or request repayment earlier than expected, such as fixed rate mortgages when interest rates fall, or other credit facilities, for similar or whatever reasons. 268 Annual Report 2018Bank of Georgia Group PLC