National Bank of Georgia: ‘Don’t make rash financial decisions, trust the Lari will stabilise’
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"Our advice to Georgian citizens and all economic players in the Georgian market is not to make quick decisions as they are likely to end in loss as the price of the USD in Georgia is exaggerated now,” reads an official statement by the National Bank of Georgia (NBG).
We expect the [Georgian] national currency GEL to stop devaluing [against the US dollar] in the near future” said NBG in it's statement today, which urged all people to remain calm and trust that the currencty will stabilise,
Today’s exchange rate saw the Lari depreciation hit its peak. Today 1 USD equalled 2.5871GEL. The previous rate was 2.5352 GEL.
Similarly today 1 EUR cost 2.7491GEL, while the previous rate was 2.6980 GEL.
Below is a graphic were you can see a comparison of the national currency rates of three Caucasian countries plus Turkish Lira in the past 30 days. The orange line shows the Georgian Lari, the blue line shows the Azerbaijani Manat, the green line represents Turkish Lira, while the red line illustrates the Armenian Dram.
The comparison graphic was made online using a tool from www.bloomberg.com.
Meanwhile from tomorrow 1 USD will equal 2.5599 GEL and 1 EUR will cost 2.7250.
The USD/GEL increased 0.0133 or 0.52 percent to 2.5771 on Friday December 2 from 2.5638 in the previous trading session.
Historically, the Georgian Lari reached an all-time high of 2.58 in December of 2016 and a record low of 1.23 in December of 1995.
While discussing the reasons behind the Lari devaluation, NBG said evaluation of the US dollar on the world exchange market was the main driver of the weakening Lari.
NBG explained the dramatic devaluation of Georgia's national currency was not caused by current economic processes in Georgia but because of the the sharp appreciation of the US dollar against other currencies.
The US dollar has been rising in value and has reached new highs recently, hitting the highest index since 2003,” said NBG.
The Bank noted one of the main factors of negative pressure on the exchange rate was false expectations about the Lari's further devaluation, and also because people were converting their Lari into USD and were saving their money in US dollar.
For this reason demand on US dollar has increased dramatically,” said NBG.
The Georgian Lari (GEL) started depreciating against the US dollar and Euro in November 2014. At this time the exchange rate saw 1 USD valued at 1.75 GEL. Since then the Lari has fluctuated and reached its previous peak in February 2016 when 1 USD equalled 2.5000 GEL.
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.
Georgia's Prime Minister Giorgi Kvirikashvili says his Government has taken steps to help the national currency regain value over the coming months as economic planners worked to restore the balance between the country's import and export values.
"The national currency is expected to appreciate in the mid-term and long-term period,” says the president of the National Bank of Georgia Koba Gvenetadze.
"The national currency is expected to appreciate in the mid-term period,” says Georgia’s Finance Minister Nodar Khaduri.
Georgia’s Finance Minister Dimitry Kumsishvili explains the national currency’s dramatic depreciation two days ago using a term economists call "supply shock”.
Global rating agency Moody’s is praising Georgia's plan to ease the loan obligations for citizens who have bank loans in United States (US) dollar by offering them to convert their dollar-dominated mortgage loans into the Georgian Lari (GEL)
The National Bank of Georgia says rumours of Russia's Alfa Bank possibly entering Georgia are absolutely false.
The National Bank of Georgia (NBG) has sold millions of dollars at the Foreign Exchange Auction to control the changing value of the national currency against the US dollar.
Georgia’s National Bank (NBG) has released a statement in which it explained that the current devaluation of the national currency, the lari, is temporary and is caused by false expectations amongst the public that the lari would be devalued in autumn.
"The current devaluation of the national currency is temporary, however if it lasts for a long time and if it threatens inflation, we will react to it and tighten the monetary policy,” says Vice President of the National Bank of Georgia Archil Mestvirishvili.
The Georgian national currency, the lari, has depreciated in value by 6.5 tetri against the US dollar and by 4.3 tetri against the Euro in just one day.
The Georgian national currency, the lari, continues to depreciate in value against the US dollar as well as the euro. The National Bank of Georgia (NBG) explains that the presidential election period is the reason behind the depreciation.