About Civil.ge
Eng | Geo | Rus
Last updated: 16:05 - 23 Jun.'17
RSS
Mobile
Twitter
Facebook
NBG Comments on Lari Depreciation
Civil Georgia, Tbilisi / 20 Dec.'16 / 15:17

The National Bank of Georgia (NBG) said on December 20 that the reason for lari’s recent depreciation against U.S. dollar is the combination of fundamental factors (global appreciation of USD, depreciation of Turkish Lira) and expectations.

“Despite the fundamental factors, according to our preliminary assessment, the current exchange rate depreciated by more than what rational expectations would suggest,” the NBG said in a statement.

GEL hit a record low against U.S. dollar after falling to 2.7412 on Monday. Exchange kiosks in Tbilisi were selling dollar for about GEL 2.80-2.81 as of Tuesday.

The National Bank said that it “will use all means and instruments at its disposal in order to limit excessive fluctuations on foreign exchange market and keep the lari exchange rate in line with fundamental factors.”

The National Bank last intervened on the currency market on October 12 – since then the Georgian currency has lost 17.3% of its value against dollar and 56% since November 2014, when GEL started depreciation.

Since the start of 2016, NBG sold a total of USD 240 million and bought USD 278.35 million in 23 currency market interventions.

Gross international reserves stood at USD 2.779 billion as of November, up from USD 2.760 billion a month earlier and from USD 2.479 billion a year earlier.

“In case of risks to price stability in the medium term, the National Bank will tighten the monetary policy,” the NBG said. A week ago the central bank kept its key refinancing rate unchanged at 6.5%. 

“The National Bank has the appropriate power and instruments in order to avoid a high inflation. The low inflation ensures the long-term stability of exchange rate and sustainable growth of the economy,” it said.

Georgia’s annual inflation stood at 0.2% in November, far below the 2016 target of 5%. The National Bank forecasts 4% annual inflation next year.

Meanwhile, the United National Movement said on Tuesday that it will summon Finance and Economy Ministers, Dimitri Kumsishvili and Giorgi Gakharia, to the session of the parliamentary minority group next week to discuss the state of the country’s economy.

“After the [2016 Parliamentary] elections, the government, the National Bank and other state institutions show complete inaction with respect to Lari exchange rate. This is exactly why GEL is depreciating on a daily basis,” MP Davit Bakradze, leader of the parliamentary minority group, said on December 20.

 

Latest News
23 Jun.'17 16:05
40th round of Geneva International Discussions
Russia and Georgia spar over security.
23 Jun.'17 15:41
MPs Pass Constitutional Changes with First Reading
Amid the opposition’s boycott, amendments were unanimously adopted by the parliamentary majority.
23 Jun.'17 01:04
Moscow Cuts ‘Investment’ Funding for Tskhinvali
90% of South Ossetia’s budget for 2017 was subsidized by the Russian Federation.
22 Jun.'17 17:20
Crime Wave Stirs Public Outcry in Abkhazia
Public demands action to stop “lawlessness” in the region, authorities promise to investigate the cases.
21 Jun.'17 16:59
Senior MEP: Mukhtarli Case ‘Very Alerting’
Rebecca Harms called for “an independent investigation” both in Azerbaijan and Georgia.
21 Jun.'17 16:16
Parliamentary Opposition Renews Calls for Plebiscite over Constitution Reform
Movement for Liberty - European Georgia submitted 150,000 signatures to the Government administration.
21 Jun.'17 14:21
Venice Commission on Georgia’s New Constitution
The Council of Europe’s (CoE) advisory body for legal affairs released its opinion on June 19.
21 Jun.'17 11:48
FM Janelidze Joins EaP Ministerial in Luxemburg
Federica Mogherini chaired the EU and EaP foreign ministers’ gathering to discuss further cooperation.
20 Jun.'17 19:05
PACE Media Freedom Rapporteur on Mukhtarli Case
Volodymyr Ariev calls for immediate release of Azerbaijani journalist.
20 Jun.'17 18:23
Prime Minister Kvirikashvili on Mukhtarli Case
Giorgi Kvirikashvili calls for avoiding “premature conclusions” over the Azerbaijani journalist’s case.

About Civil Georgia
Civil.Ge © 2001-2017, Daily News Online
Registered office: 2 Dolidze Str, 4-th Floor.
79