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NBG: GEL Was Strengthened More than the Fundamental Factors Conditioned

NBG: GEL Was Strengthened More than the Fundamental Factors Conditioned

Vice-President of National Bank of Georgia estimates the recent drop of GEL rate.

Archil Mestvirishvili explains, that commenting on instant change of GEL rate is not correct in order to avoid creation of expectations at the market. Manager of NBG names the reasons, which caused fluctuation of GEL rate.

“Due to the correction of external sector, GEL has strengthening trend in Georgia. But GEL was strengthened more by that moment than the fundamental factors conditioned, which has been followed by natural correction. This is characterized to the foreign exchange market and exchange rate never has linear dynamics. However, referendum of Britain has caused changes at the international market and had an impact on GEL as well. It should be noted, that rate devaluation should be followed by strengthening in the case of floating exchange rate regime”, – Mestvirishvili declares.

To note, the main change of the country is dollarization of credits and calls for the population to carry the foreign exchange operation sensibly. The central bank of the country notes, that the rate should have a strengthening trend in the long-term dynamics.

“We have high growth comparing to the countries of the region and supposedly it should be higher in the future. Inflation is low, which indicates that the rate has a strengthening trend in the long term period” .