Home / Economy / Georgian Government Explains the Reason of GEL rate Drop
Georgian Government Explains the Reason of GEL rate Drop

Georgian Government Explains the Reason of GEL rate Drop

Georgian government disseminates the statement on recent drop of GEL exchange rate.

The statement notes on the floating rate of national currency in Georgia, which change is impacted by internal and external macro economic factors and expectations. According to them, temporary changes in the exchange rate are caused by the following factors:

Significant devaluation of local currency in neighboring trade partner countries; Increased currency outflow in the recent months due the import, which has not been stabilized on the export markets because of price growth;

Due to the creation of negative expectations linked to GEL rate, which is supported by attempt of speculative themes from various groups; The government announces acting steps which is directed towards reduction of surplus dollarization. However, complex arrangements are planned as a result of consultations held by the government and NBG with International Monetary Fund (IMF).

“However, the focus should be made on acceleration of economic growth in the budget of the next year – portfolio of infrastructural projects will be grown. In addition, administrative costs will be significantly reduced and 2017 budget will be focused on strengthening of sustainable and stabile fiscal environment. The same approach should be made on the budget of next years.

The joint acting plan will be announced in the nearest days, which envisages taking concrete steps based on market – mechanisms in direction of consistent reduction of dollarization “, – the statement reads and notes, that the arrangements envisaged by the plan will support establishment of positive expectations and stabilization of GEL rate.