The national currency of Georgia, the Lari (GEL), is continuing to strengthen against the US dollar and the Euro after falling dramatically about seven months ago.
For several days the Lari has steadily regained some of its value; it’s first appreciation since plummeting about 30 percent in value since November last year. Today, several small local exchange booths sold US currency at a lower rate than the official exchange rate offered by the country’s leading banks. Around the country today the exchange rate to the US dollar was teetering between 2.26 to 2.27 GEL and even lower in some exchange booths. As for the Euro, some booths sold the currency at a rate of 1 EUR for 2.50 GEL and others for 2.55 GEL.
Today’s exchange rate set officially by the National Bank of Georgia (NBG) noted 1 USD equalled 2.3234 GEL. However by 5pm the value of the Lari had increased and the official rate was 2.2545 GEL. Yesterday’s exchange rate was 2.3378 GEL. As for the Euro, NBG’s official data noted from May 21, 1 EUR cost 2.5794 GEL, however at 5pm, 1 EUR was equal to 2.5151 GEL. Yesterday’s exchange rate saw 1 EUR equal 2.6204 GEL. When explaining the sharp appreciation of the Lari, NBG deputy president Archil Mestverishvili said Georgia had “one of the best monetary policies and one of the best responses to shocks in the region”.
- Of course it is not a big relief for those people who have loans in the US dollar and income in the Lari. And in terms of operating the monetary policy [those responsible] did the best they could,” Mestverishvili added.
Meanwhile, NBG president Giorgi Kadagidze said he did not expect the Lari to depreciate further in the mid-term period. Kadagidze said the Lari had recently gained value due to several significant factors, of which the most important was that the existing depreciation had influenced the tax balance. As a result of this, imports were corrected and the Lari exchange rate was no longer under pressure. He also said Georgia’s tourist season and other economic events represented additional factors.
Meanwhile the country’s Finance Minister Nodar Khaduri expressed hope that the Lari will continue gaining value “and I think the ongoing processes in the country will facilitate this”. Despite the slight appreciation of Georgia’s national currency in recent days, Minister of Infrastructure and Regional Development Nodar Javakhishvili emphasised the importance of implementing infrastructural projects that would support the strengthening of the Lari. “The majority of infrastructural projects are financed by foreign donors, which guarantees US dollar inflow into the country. Of this, a large portion will be spent in the Lari,” said Javakhishvili.