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National Bank not Expects Further Devaluation of the National Currency

According to the forecast of the National Bank of Georgia, inflation will peak in the first quarter of 2016, but in the second quarter will return to the target rate of 5% -NBG President George Kadagidze states.

In his words, at present, inflation is much higher than the planned target, but it was quite predictable.

“This was stated in the report of the National Bank in August. According to our forecast, inflation will peak in the first quarter of 2016, but in the second quarter will return to the target. However, if we see the need for monetary  policy tightening, we certainly will do that,” Kadagidze says.

He says , now Georgia’s economy is at a stage of development which will make it possible to reduce the projected level of inflation to 3% in 2017.

“Right now, our inflation target is 5%, and we consider it best for the situation in which we are. Inflation  is the average rate of growth of consumer prices. This does not mean that the prices of all goods will rise smoothly from 5% to 6%. Some  goods  may even become  cheaper, and some can rise in price even more than 6%. If we see the danger of further growth of inflation, we will tighten monetary policy. Now while all goes as expected,” the head of the National Bank states.

According to the Statistics Service, in November 2015, inflation amounted to 6, 3% in comparison to November 2014 In the words of NBG President,  in the current situation there is no reason for the further devaluation of the lari.

“We do not expect a further depreciation of the national currency primarily  because of the economic shock experienced by the  country    that has affected the lari. I can repeat what I said earlier – the current level of pressure on the national currency doesn’t  contain the risk of a further devaluation,” Kadagidze points out.