Georgian Currency Recoding Fall since March 2015

Georgian currency depreciated by a record 1.3%, falling to 2.40 against the US Dollar starting this week.

On Monday, the National Bank of Georgia (NBG) set the biggest single-day drop rate since March 2015; and by Tuesday, August 25, exchange kiosks in the country were selling the US dollar for about 2.44 GEL. The same day, commercial banks in Georgia sold the US dollar for about 2.44 – 2.48 GEL.

“Naturally, ongoing geopolitical problems influence Georgia”, Archil Mestvirishvili, NBG Vice President said, but according to him “the main factor is negative expectations concerning the GEL depreciation in autumn.”

“Economic shocks and expectations have already influenced the national currency and the monetary incomes that impact the GEL have already been reflected in imports dynamics. We do not expect any additional fluctuations in the GEL exchange rate” he added.

Economic Minister Giorgi Kvirikashvili said on Tuesday at the government’s meeting, that Georgia’s macro-economic parameters showed external shocks that have pressured the currency. This included the falling of Georgia’s external earnings from remittances and exports, which have already been “completely offset”, along with declining imports. The Economy Minister Kvirikashvili further continued that this record single-day drop was a result of “speculative transactions” and “stirring” among market participants.

Following the remarks of the Economy Minister Georgian PM Garibashvili said: “We can conclude that we are facing obvious speculation and stir; that’s an emotional-psychological factor.”

Irakli Garibashvili asked businessmen and the population to disregard the stir caused by media and experts, and to take into consideration only the information the government provides.