Government reveals short-term plan for national currency

From tomorrow 1 USD will equal 2.2953 GEL - up from the previous rate of 2.3157 GEL. Photo by N.Alavidze/, 15 Nov 2016 - 17:36, Tbilisi,Georgia

UPDATED: 17:36

The President of Georgia Giorgi Margvelashvili is welcoming the Government’s decision to work with the National Bank of Georgia to stabilise the Georgian Lari (GEL).

Margvelashvili hoped the Government and the NBG would create a joint action plan to stabilise the national currency in in the shortest period of time and reduce the impact of the fluctuating currency on the people of Georgia .

The President believed in this type of situation it was important to take fast, efficient and sometimes extraordinary steps so the general population are not affected.

The President noted he was in constant communication with the Government and the NBG regarding the Lari issue.

EARLIER: 11:14

The Government of Georgia is promising to take steps to stabilise the national currency and even support the Georgian Lari (GEL) to regain value following a sharp decline since mid-August.

This morning the Government of Georgia made a special announcement that highlighted the ways how the Government was going to do it.

The Government believed a high dolarisation rate in the loan portfolio was the most acute problem people in Georgia currently faced. A high dolarisation was when the percentage of loans in US dollar in the total volume of foreign currency denominated loans was high, and the main reason for dollarisation was because of greater stability in the value of the foreign currency over the domestic currency.

Taking into account this challenge, the Government together with the National Bank of Georgia (NBG) and the International Monetary Fund (IMF) planned to take following steps to stablise the Lari:

  1. Next year's budget will focus on accelerated economic growth – the portfolio of infrastructural projects will be increased. At the same time administrative costs will be reduced.
  2. In the coming days the Government will announce a Joint Action Plan to stimulate a de-dollarisation process in the country, meaning that the share of loans in US dollar will be reduced in the foreign currency denominated loans.
As a result, the majority of the population will not depend on the short-term fluctuations of the Lari, caused by negative external factors, as the economic environment will be healthier in the country,” said the Government of Georgia today.

The Government also explained the floating currency rate in Georgia was dependent on internal and external macro-economic factors and expectations.

Meanwhile today 1 USD cost 2.4890 GEL. The previous rate was 2.4899 GEL.

Similarly today 1 EUR cost 2.6797 GEL, while the previous rate was 2.7098 GEL.