National Bank of Georgia sells $20 mln amid Georgian lari depreciation

The National Bank of Georgia has sold $20 million to stabilise the Georgian lari today after further depreciation. 

Against the backdrop of the outbreak of the coronavirus and the global oil crisis, the Georgian national currency, the lari, has significantly depreciated against the USD in recent weeks.

As of today, 1 USD costs 3.2044 GEL, while 1 EUR costs 3.479 GEL.

The National Bank will carry out foreign exchange interventions more actively this year,“ the National Bank of Georgia said.

The bank says that its policy of building up foreign currency reserves in recent years has paid off:

It was the policy of accumulating reserves that made it possible for the National Bank of Georgia to provide additional foreign exchange resources to the market through interventions in the face of this particular situation,“ reads the announcement of the National Bank of Georgia.

On March 13, the NBG released a statement in which it said that the recent depreciation of the lari exchange rate was linked to uncertainty caused by the coronavirus outbreak that has been transmitted to the financial markets through the channel of expectations.

Besides the coronavirus, the NBG said that another reason for the depreciation of the lari is the decline in international oil prices.

On March 25, the National Bank of Georgia sold 40 mln GEL at foreign exchange auction, while it sold another $40 mln on March 19 and $20 mln on March 13.

The National Bank of Georgia (NBG) is keeping the refinancing rate at 9 per cent.