After gaining value Georgian GEL depreciates again

Georgian national currency GEL (Lari) has depreciated against the US Dollar and Euro after it recently started to gain value when the National Bank of Georgia (NBG) intervened and sold $40 million from its reserves last Thursday.

The NBG has set a new exchange rate, according to which, dollar price has become GEL 2.9321 while the previous rate was GEL 2.8946.

As for the euro, its exchange rate is GEL 3.2840, while the previous rate was 3.2312.

After the Lari lost value again, the National Bank released a statement saying a short-term dynamics of the GE L’s exchange rate is influenced by many factors, and they will use all the available tools in case of necessity of interventions.

“The National Bank is independent of political or other influence and operates within the constitutionally mandated rights. Under the inflation targeting regime, the goal of central banks is to maintain long-term stability of the exchange rate, which is a prerequisite for the National Bank’s mission – the stability of pricing and financial system,” the statement reads.

It also says that the NBG will act in pursuit of the long-term stability goals of the exchange rate and if necessary, we will use all available tools, including foreign exchange interventions, to prevent high inflation.

Prime Minister of Georgia Mamuka Bakhtadze believes that the National Bank has all mechanisms to take principled steps. According to him, the Georgian economy is healthy.

“The analysis shows and the steps taken by the National Bank last week reaffirmed that the current processes in the economy are healthy. Accordingly, the National Bank has all the means and mechanisms to take principled steps in this situation,” he said.

Speaker of the Parliament Archil Talakvadze also commented on the GEL exchange rate. According to him, both the authorities and the political opposition, bear the responsibility for it.

“We, as a government, have a responsibility to manage these areas, these issues. At the same time, of course, the political opposition also bears more responsibility when we finally saw that many actions, unfortunately, were used by our opponents, the hostile forces towards Georgia, against our country. Unfortunately, this has also inflicted damage on the economy, which has been reflected in the currency as well,” he noted.

Talakvadze expressed hope that the interventions that have taken place, and what the NBG has planned for the future, will stabilize the national currency.