National Bank: Lari devaluation temporary, caused by false expectations

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.

As of today $1 costs 2,61 GEL and €1 is equivalent to 3,03GEL.

There were high expectations in people that the lari would lose its price in the autumn despite the fact there were no grounds for that. The expectations made an influence on the national currency in the short-term perspective only”, the bank wrote, referring to expectations when people try to buy foreign currencies as they are afraid of the devaluation of a national currency.

The bank stressed that mid-term and long factors having an influence on the national currency were positive and the tendency would continue in the next year.

Based on September data, incomes from solid export and tourism has risen about 30 percent and remittances have increased by 20 percent,” the bank wrote.

The NBG said they were in active communication with the government of Georgia and in the case of any threat of inflation they are ready to use all levers to avoid high inflation.