President, head of National Bank discuss Lari tumble

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.

The Lari has fallen to its lowest level since April 2004.

The President’s Office said Margvelashvili and Kadagidze spoke about "economic difficulties" in the country and about measures needed to overcome them.

"Declining exports and money transfers [from abroad to Georgia] and its negative impact on the national currency was also noted,” the President’s Office said.

Meanwhile, the impacts of the thinly traded Lari fluctuations in early December 2014, were mainly felt by those whose income was in Lari while borrowing in US Dollars.

Kadagidze responded to the events by saying: "We will use all instruments at our disposal to ensure that the current events do not have a negative impact on inflation and the financial situation of the population. Given Georgia’s high economic growth rates [its gross domestic product growth rate was 5.2 percent in the second quarter of 2014], the national currency is expected to appreciate in the medium term.”

His statement proved to be correct and by mid-December 2014 the Lari had already recovered most of its losses.

Meanwhile, leading British newspaper The Guardian said the recent collapse of the Russian Ruble posed a threat to nine countries that relied on remittances, including Georgia.

Georgia and eight other countries, which heavily rely on cash sent home from Russia for their economic buoyancy, could collectively lose more than $10 billion USD (19.6 billion GEL) in 2015 because of the weak Russian currency, reported The Guardian when quoting World Bank figures.

Last year the Russian Federation led the list of the top countries from which the largest share of remittances were sent to Georgia.