Georgian GEL Continues to Devaluate

The Georgian national currency GEL (Lari) has continued to devaluate throughout the month of October.

The National Bank of Georgia (NBG) has set a new exchange rate, according to which one dollar price equals GEL 2.6855. The rate for October 16 was GEL 2.6664.

The Euro exchange rate is GEL 3.1095, while the previous rate was 3.0925 GEL.

To compare, on October 1, the exchange rate for one Euro was 3. 0306, while $1 cost 2.6151.

Vice-President of the National Bank of Georgia, Murtaz Kikoria, said that depreciation of the GEL is caused by false expectations, adding the fundamental macroeconomic factors are not the basis for this kind of instability of currency.

"We do not think that there is a serious factor causing the currency fluctuation we have today. Our response strategy to this process is reduction of dollarization. Our main mandate is inflation. So, under the lower inflation and decreased number of loans in foreign currency, the instability of the currency will have a smaller effect on the population,” he explained.

By Thea Morrison