Acting National Bank Governor: Bank avoided impoverishment, devaluation of national currency

Natia Turnava, the Acting Governor of the National Bank of Georgia, on Friday said the Bank had avoided “impoverishment and a devaluation of the national currency” to Georgian citizens during the period when the country’s economy remained “healthy and such processes should not happen”.

In her comments on selling foreign exchange reserves by the central bank this year, Turnava explained due to the pre-election stir, the demand for dollars had increased, adding the Bank was obliged to “extinguish this temporary excitement in the market”.

If we had not made this intervention, believe me, there would have been an immediate devaluation of lari [national currency], which would have impoverished our population, destroyed business, shaken the confidence in the [Georgian] lari, gained with so much effort, and it would have been much more difficult to turn around”, she noted.

Turnava expressed confidence the foreign exchange deficit would be reduced by the end of the year and the country’s foreign reserves replenished.

As of November 8, since the beginning of the year, we have net sales of $540 million, I do not rule it out and I am sure that since the [pre-election] hype has passed and the pressure on the market has been removed, by the end of the year we will bring this deficit down and we will be able to restore reserves again”, she pointed out.

Turnava also said the central bank would not be able to “completely eliminate the deficit” within the year, adding the Bank was now in a position to begin rebuilding reserves.