Economy Minister: Georgian Currency Has No Problems

Giorgi Kobulia, Minister of Economy and Sustainable Development, says that the Georgian currency GEL (lari) has no fundamental problems which will cause its devaluation.

The minister made the statement while commenting on the recent fall of GEL against the US Dollar and Euro.

The National Bank of Georgia (NBG) has set a new exchange rate, according to which, one dollar price has become GEL 2.6855. The rate for October 16 was GEL 2.6664.

As for the euro, its exchange rate is GEL 3.1095, while the previous rate was 3.0925 GEL.

Kobulia says that GEL experiences slight fluctuations, which do not give grounds for panic. According to him, this was caused by the false expectations and the situation in the region and not because Lari has problems.

“Together with my colleagues we are fundamentally analyzing the state of GEL Georgia's currency is one of the solid and one of the most stable currencies in this region. It has no fundamental problem nowadays to further depreciate,” he explained.

The minister says that around 15% depreciation of the national currency means nothing serious and it is caused by the economic developments in Russia and Turkey.

“When investors see what happens in Turkey and Russia, they think situation might not be stable in Georgia too, so they panic,” Kobulia told Imedi TV.

Murtaz Kikoria, Vice-President of the National Bank of Georgia, said that depreciation of GEL is caused by false expectations, adding the fundamental macroeconomic factors are not the basis for this kind of instability of currency.

"We do not think that there is a serious factor causing the currency fluctuation we have today. Our response strategy to this process is reduction of the dollarization. Our main mandate is inflation. So, under the lower inflation and decreased number of loans in foreign currency, the instability of currency will have a smaller effect on the population,” Kikoria explained.