National Bank Head Expects Lari to Gain Value

TBILISI – Head of the National Bank of Georgia (NBG), Koba Gvenetadze has positive expectations over the Lari's future and says the national currency is going to stabilize soon. 

However, the Lari (GEL) continues to devaluate against the US Dollar, and currently one dollar officially costs 2.48 GEL but in some commercial banks it reaches even 2.52 GEL.

The rise of the dollar resulted in increased prices of products, clothes and food. Financial experts do not have positive expectations. 

“I think in medium and long-term period Lari will gain value. However, it is difficult to make such predictions, as the currency rate in Georgia is floating and it is affected by many internal and external factors,” stated the NBG Head.

Georgia’s main opposition party the United National Movement (UNM) says that Lari devaluation is the result of the government’s inefficient policies.

“The government is carrying out such policies, which directly lead to Lari depreciation,” Zurab Chiaberashvili, the UNM member stated.

The economists say that the government has too much internal debt, and it cannot balance expenses and income.

“In this case the government should reduce administrative expenses in order to eliminate deficiency,” said Givi Adeishvili, Economic Analyst of Non-Governmental Organization – Society and Banks.

Some experts disapprove of the actions of the National Bank of Georgia, which sold its dollar reserves several times before the October 8 parliamentary elections. The experts doubt these actions were aimed at keeping Dollar rate low in order to attract more voters.

The GEL began to lose its value in November 2014. At that time, one US dollar was equivalent to 1.75 Laris. Since then, the National Bank has intervened many times but the Lari still continues to devaluate against the dollar.

By Thea Morrison