Finance Minister explains the sudden depreciation then strengthening of the Georgian Lari

Georgia’s Minister of Finance Dimitry Kumsishvili explains the national currency’s dramatic depreciation two days ago using a term economists call "supply shock”.

Kumsishvili said the recent depreciation was caused by several wrong decisions made by players in the private sector.

When we started to analyse the market we found out that there was no increased demand and the demand was exactly the same as in previous days. But some people, companies or other economic subjects, decided not to sell USD,” Kumsishvili said.

This caused a very quick rising movement but as soon as the right communication and prompt information exchange took place, the market was regulated by itself.”

The Minister believed the Lari's strengthening in the second half of the day was thanks to the right coordination by the state.

Also, the statement by the National Bank was very timely,” Kumsishvili said.

Yesterday the National Bank of Georgia advised Georgian citizens and all economic players in the Georgian market not to make rash decisions as they were likely to end in loss, as the price of the USD in Georgia was currently exaggerated.