National Bank forecasts no risk of higher inflation
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The National Bank of Georgia (NBG) believes there is no risk of higher inflation than what has already been forecast as the Georgian Lari continues to depreciate in value against the US Dollar. It is currently the lowest it has been in four years. The forecast inflation is 5 percent.
At a press conference today NBG president Giorgi Kadagidze said there were two reasons that gave his optimism that there was no risk of higher inflation in the country. These were the global decreasing cost of main commodities and unlike previous years, the money supply had not been increased.
Kadagidze was confident the depreciation of the Georgian Lari was caused by "inside and outside factors”.
- As of December 5, $1 USD was valued at 1.9527 GEL.
- Since November 18, the value of the Georgian currency against the US Dollar has dropped 10.6 percent.
- Latest data from state statistics office Geostat revealed Georgia’s annual inflation rate was 2.8 percent in November, down from 3.4 percent in October.
"Historically, Georgian Lari to US Dollar exchange rate has been trending lower in the past seven years and the sources of the inner currency inflows have been weakening. We believe this misbalance has already been eliminated and it has already reflected on the Lari exchange rate,” Kadagidze said.
"We are observing the situation of the past few days and it is clear that the process that is happening is mainly caused by the excessive behaviour of industry insiders, which is generally characteristic of the financial markets.”
Kadagidze called on market insiders not to make "unwary” decisions regarding converting money as they would always loose. "After the decline come rise,” he said.
Kadagidze pledged the NBG would do its best to "guarantee the financial and macroeconomic stability of the country".
"The aim of the National Bank was to preserve the stability of prices. There is no fear of financial and macroeconomic stability of the country," he said.
Meanwhile, Prime Minister Irakli Garibashvili met the economic profile members of the cabinet of ministers and discussed the situation in the country.
"The Government of Georgia has been pursuing a consistent policy, therefore, there is no fear of worsening the financial stability and the Lari exchange rate in a long-term period,” the press office of the Prime Minister said in a statement.
Similarly, the value of the Georgian Lari steadily decreased in the same period of last year. At the time the Government said the slow increase of the economy and budget spend were the reasons behind the Lari fluctuation.
The Georgian Lari is continuing to depreciate in value against the US Dollar and is currently the lowest it has been in four years.
The suddenly decreasing value of the Georgian Lari is the lowest it has been against the US Dollar since 2010.
As of January 31, 1 GEL is valued at 1.7819 USD - the lowest it has been against the US Dollar since 2011.
Currently, the steadily decreasing value of the Georgian Lari is the lowest it has been against the US Dollar since 2011. As of January 18, 1 GEL is valued at 1.7678 USD.
National Bank of Georgia’s (NBG) President Giorgi Kadagidze said the bank may tighten cash conditions in the financial system to address the inflation risks.
An International Monetary Fund official believes the recent fluctuations of the Georgian Lari will not shake the country’s macroeconomic foundation.
Chief Economist for the Europe and Central Asia region of the World Bank Hans Timmer believes the recent tumble of the value of the Georgian Lari has nothing to do with the weakness of the Georgian economy.
Georgia’s national currency faces no fear in value, and on the contrary in the coming days it will become even stronger, said Georgia’s Prime Minister said today after the Lari fell to its lowest level in early December 5 since May 2004.
This year’s budget will be 100 percent fulfilled and all funds will be spent appropriately, said Georgia’s Finance Minister Nodar Khaduri at today’s Government meeting.
Head of the National Bank of Georgia (NBG) Giorgi Kadagidze has been named as the Central Bank Governor of 2014 for Europe by the prestigious Banker Magazine.
Georgia’s President Giorgi Margvelashvili has met head of the country’s National Bank Giorgi Kadagidze as the Georgian currency, the Lari (GEL) continues to depreciate in value against the US Dollar.