National Bank forecasts tightening of GEL

National Bank of Georgia’s (NBG) President Giorgi Kadagidze believes the Georgian Lari will tighten in a short term period following the steady decrease in the value of the local currency over the past three months.

As of January 31, 1 GEL valued 1.7819 USD - the lowest it has been against the US Dollar since 2011.

National Bank of Georgia said in the past 12 months the value of the Georgian currency against the US dollar had decreased by 5%.

"Factors that have influenced the exchange rate have been solved, including the softened cash conditions, increase money supply as well as the international issues from our trade partners,” Kadagidze told journalists.

The NBG president said the policy would be tightened slightly to combat a possible fluctuation of the Lari exchange rate, inflation risks and exceed the forecasted level.

The figures revealed the annual inflation rate in December 2013 was 2.4% - the highest it has been since October 2011, as the prices on food, tobacco, housing, water, electricity, gas and other fuels increased.

Kadagidze said Georgia had a flotation money exchange rate, which meant the exchange rate could swing.