Georgia's currency, the lari (GEL), experienced its biggest day-drop against the US Dollar in 2015, on August 25.
Georgian lari experiences its biggest day-drop in 2015
By Tea Mariamidze
Wednesday, August 26
According to the exchange rate, set by the National Bank of Georgia (NBG) for August 25, the GEL lost 1.3% of its value, because 1 dollar now costs 2.3640 GEL instead of the exchange rate of August 24, 2.3336 GEL.
Moreover, the national currency depreciated in relation to the euro too. According to the data of the NBG, from now 1 euro costs 2.7162 GEL, which was 2.6342 Gel before.
Georgia’s Minister of Finance Nodar Khaduri has declared, there are some speculations about the market, but he is confident the GEL exchange rate will stabilize.
“We expect an additional 110 million USD by the end of the year. This means that about 200 million USD will be received by budgetary operations,” he stated.
According to the Vice PM and Minister of Economy Giorgi Kvirikashvili, nothing special is happening with lari exchange rate.
He stated that government is ready to revise budgetary components and believes that in the current situation “stability is more important than development.”
Prime Minister also made comments about the issue at the government meeting on August 25.
He called the current situation is “absolutely explicit speculation and unrest” and called upon the citizens and businessmen to keep calm.
“The imbalance between the export and import is eliminated and we do not have any fundamental problems, on the contrary, we overcame this phase,” Garibashvili said.
However, economic experts do not share his views. They think that the policy of government is "ineffective" and more budgetary expenses should be reduced.
“Costs should be reduced, also deregulation of the economy, reduction of barriers and restrictions would be a good signal for Georgian economy,” economist Giga Bedineishvili said.
Another expert, Akaki Tsomaia, believes that on the background of internal and external factors, “the government should change socially oriented policy of the state budget and a sharp reduction in taxes and budget expenditures should take place.”
The devaluation of the lari against the US Dollar started in November 2014, when 1 dollar was worth 1.7542 GEL. Since then, the process has become irreversible.