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NBG President Says Lari to Stabilize Soon

According to the President of the National Bank of Georgia (NBG)  Giorgi Kadagidze, lari will stabilize soon.
“Much has been said about the fundamental factors that led to a decrease in foreign exchange inflows in the country, which ultimately caused  the devaluation of the national currency. As of today, the rate of the national currency fell by 30%, but this is not reflected in the import. But soon it will happen, and imports will  fall, which means a decrease in demand for foreign currency, respectively, there are fundamental reasons for GEL quick  stabilization, “- said Kadagidze.

In his words, inflation expectations always have an  impact on the rate of the national currency, and in such a situation the commercial rate is slightly higher than set by the  National Bank, and the difference between the sale and purchase is higher than normal.

“But once an agiotage dies down, and the expectations calm down, the difference returns to normal. As for the reserves of the National Bank, they are sufficient to ensure the country’s financial stability. On the other hand, we have an economic shock to which we respond. 30% devaluation is quite a serious figure. To remedy this situation, fundamental problems and growth of foreign exchange earnings   into the country are to be  solved. This is the only way to ensure financial stability in the long term. All the rest can only mitigate the negative impact of the processes occurring in the economy, “- said the president of the National Bank.

According to him, the intervention of the National Bank has a specific price.

“There are many different comments about the delayed reaction of the National Bank  that we had to take action earlier. But this is not so, because our intervention has its price, and its consequences that affect the rate of economic growth, lead to an increase in interest on loans, lower level of sales, and so on. We have no right to improve the situation in one  direction, and worsen in the other ,”- Giorgi Kadagidze adds.