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Value of the lari decreases

By Tatia Megeneishvili
Wednesday, November 26
The devaluation of Georgia’s national currency has started. Similar to last year, the value of the lari has decreased. One dollar is now 1.83 Lari, up from1.76 GEL two weeks ago.

Analysts warn about the increase in price. However, the Ministry of Finance sees no threats in the inflation process.

Deputy Finance Minister Giorgi Kakauridze said that the value of the USD has strengthened all over the world and the process is natural.

“This fact has no connection with the budget of Georgia. We have money that must be spent and mostly we receive money in foreign currencies. Thus, at some point, the situation might even be profitable,” stated Kakauridze.

Chairman of the Parliamentary Finance and Budget Committee Davit Onoprishvili said that the National Bank of Georgia has reserves. “The government has mechanism not to let the Lari devalue too much. People remember that last year we had the same situation, but this fact had no influence on Georgian budget or the public,” stated Onoprishvili.

Economic Expert Levan Kalandadze said that the latest inflation may create many problems. He stressed that the government failed to learn from its previous bad experience.

“Our country has now two choices. We can formally fill the budget, which risks causing serious problems to people and the national bank’s reserve stores, or the government could make a political calculation and recognize that it had planned the budget poorly. In the case of the second choice, the budget will face a breakthrough,” Kalandadze said.

Last year, in order to boost the Lari, the National Bank of Georgia wasted 220 million dollars from its reserves from November 2013 to January 2014. The process of inflation lasted from November 2013 to February 2014.