GEL revalued

On November 10, after trading at the Tbilisi Interbank Currency Exchange, USD 1 equaled GEL 1.65. The National Bank of Georgia, along with one commercial bank as sellers and thirteen commercial banks as purchasers, took part in the trading session. Thirteen new deals were concluded with a total trade turnover of USD 47 200 000.

On the same day Davit Amaglobeli, the Acting President of National Bank of Georgia, commented on the new official currency rate at a special press conference at bank. He spoke of the inevitability of changes in currency rates.

“The change in the currency rate has been prompted by economic considerations. The most appropriate time to make those changes has been chosen, one which gives us the possibility for arranging and requoting the prices on goods at the market. The rate has reached its best balance point in relation to other currencies worldwide. The National Bank of Georgia will continue making interventions to keep the current rate stable. The National Bank of Georgia has enough funding resources to keep the rate where it is,” Amaglobeli stated at the briefing.

The Acting President noted that these changes won’t have any negative influence on inflation as there are no economic reasons for prices of goods to rise. But he also admitted that there is a possibility that some private enterprises may try to profit from the current situation by establishing their own prices. Amaglobeli suggested that the establishment of the new rate will promote economic regeneration and raise the level of competition within the country.

Independent Georgian analyst Gia Khukhashvili has commented that “The Georgian Government has decided to bring the National Currency to a particular point due to problems with its currency sources,” he suggesting that this step will cause social imbalances among the Georgian population. “On the one hand our country depends mostly on imports, which means that the official currency rate will hasten the process of inflation. The prices of goods will seriously rise. But the revaluation should also stimulate exports, which are unfortunately underdeveloped in Georgia,” Khukhashvili added.