National Bank Links GEL Devaluation to Presidential Elections

The National Bank of Georgia (NBG) has set a new exchange rate, according to which, $1 equals 2.7524 GEL. The previous rate was 2.7383. €1 costs 3.1386 GEL. The previous rate was 3.1162.

The NBG says the devaluation of the national currency is linked with the Georgian presidential elections.

The National Bank released a statement, calling on public figures and experts to abstain from making statements and forecasts about the exchange rate dynamics to avoid the emergence of false expectations.

“Based on the information available to us, the recent exchange rate fluctuations are unrelated to economic fundamentals; the current exchange rate dynamic is negatively affected by the environment surrounding the presidential elections, which is reflected in the FX market,” the NBG stated.

In addition, the statement says that the US dollar is currently overvalued vs the Lari and as a result, the National Bank advises the general public and economic agents not to make hasty decisions which are likely to hurt them.

“The above once again confirms the previous statements of the National Bank recommending the public to take loans in the same currency as their income to avoid FX risks. We would like to remind you that the goal of the National Bank is to maintain price stability in the mid-term,” the bank said.

"The NBG vows to use all the instruments at its disposal to avoid high inflation“, reads the statement posted on the website of the National Bank.

By Thea Morrison