Georgia’s Finance Minister predicts GEL stabilisation

Georgia's Finance Minister Nodar Khaduri hopes the country’s national currency will stabilise after the Lari (GEL) dropped to the lowest it has been against the US Dollar since April 2004.

"It is obvious that the dollar has tightened against all currencies in the world. You know that the exchange rate between the US Dollar and the Euro has reached a historical minimum. As for the Lari, it has tightened against many currencies such as the British Pound, the Euro and more," he said today.

"I want to once again stress that together with the National Bank we are working very actively. The economic team does everything to end these fluctuations and stabilise the GEL,” Khaduri noted.

According to today’s data, $1 USD was valued at 1.9962 GEL, meaning the Lari has slightly decreased since January 24 when its value was 1.9935.

National Bank president Giorgi Kadagidze also spoke about the Lari yesterday and said if Georgia's economic growth exceeded the economic growth of its partner countries, the GEL would show a tendency to be tightened. 

"In the medium term, if we have economic growth, the Lari will have a tendency of tightening. I’m talking about in the medium term, and in other cases, with the floating exchange rate policy, the GEL adequately reacts towards processes,” he noted.

Kadagidze explained the sharp depreciation of the GEL with the decrease of economic sources, in particular the decline of export, remittances, tourism revenues and other means.

The National Bank president also noted that despite inflation expectations, no vast increase in the prices of products had been detected.

"One of the reasons for this was ... the decline of oil and prices of other commodities. In addition, you know that in regards to our partner countries, the GEL has not depreciated. Therefore these two factors together have a positive influence and in total no significant increase of inflation has been detected,"he noted.

"However, if we see a significant increase in inflation expectations and prices, our responses will be adequate and we will take appropriate measures,” he said.

In recent weeks the Lari experienced a sharp depreciation against the US Dollar. Currently the official rate is 1.99 GEL to $1 USD however at exchange booths the value exceeds 2.00 GEL.

This is the lowest the Lari has fallen to since April 2004, however new information released today showed that the GEL was one of the least depreciated currencies worldwide. Recently it had fallen less than the Euro, Japanese Yen, Swedish Krona, Norwegian Krone, Polish Zloty, Moldovan Leu, Hungarian Forint, Bulgarian Lev, Croatian Kuna, Czech Koruna, Armenian Dram, Canadian Dollar and more.