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Factors Behind the Georgian Lari’s Depreciation
Photo: IPN

Factors Behind the Georgian Lari’s Depreciation

National currency continues its free-fall. Economic experts believe that the lari depreciation was caused by the domestic economic problems.

The head of the Accumulation Management Company Private Banking, economic expert Irakli Berdzenadze says in his interview with Commersant that the cause for the depreciation of the lari is the country’s economy which has nothing to do with international financial markets.

“It is quite difficult to talk about the lari’s devaluation. However, there are several factors: fewer dollars are coming into the country, investments have decreased especially in the last quarter. In addition, certain manipulations are performed in the market. The cause for the lari’s falling is in domestic economic processes. In this regard, the lari does not depend on external factors , it’s only domestic economic problem,” – Berdzenadze notes.

Financier and economist David Tsikaridze believes that the Georgian lari actually reflects the situation of our economy.

“The lari’s free-fall reflects the condition of national economy. Until the country’s economy recovers, the lari will experience similar shocks”, – David Tsikaridze notes.

TSU professor, economist Emzar Jgerenaia thinks the depreciation of the national currency was caused not only by domestic economic problems.

“There are several reasons for the devaluation of the lari, such as the balance of payments, the reduction of export and import growth as well as reduced investments. But we can not blame only domestic economic problems for this. Of course, external factors still exert their influence on the internal economic processes,” – Jgerenaia points out.