Georgian forex market stable, no economic reasons for lari's depreciation - central bank
TBILISI. Dec 5 (Interfax) - Georgia's forex market is currently stable and there are no macroeconomic factors for a major depreciation of the lari, the acting governor of the National Bank of Georgia (NBG), Natia Turnava said.
"At this stage there are no economic factors causing fundamental changes and the depreciation of the lari. The impact of non-economic factors exists, of course, but not to such an extent as to necessitate our intervention right now. The market, unlike in the pre-election period, is currently balanced, dynamic and slowly moving toward stabilization. We have levers for intervention and we'll help the market if necessary," Turnava said in parliament while presenting the draft monetary policy guidelines for 2025-2027, the parliamentary press service reported.
"Along with a low level of inflation, economic indicators are high. According to preliminary data, economic growth amounted to 10% in January-October 2024," Turnava said, adding that she hopes the healthy trend of strong economic growth and low inflation will continue.
In general, the forex market "is demonstrating signs of stability," she said.
The NBG is proceeding from the assumption that the presented monetary and exchange rate policy will ensure the stability of prices in the medium term and thereby increase the economy's resilience to possible shocks and facilitate stable long-term economic growth, Turnava said.
Georgia's currency has fallen to its lowest level against the U.S. dollar since at least mid-June amid the ongoing mass protests in Tbilisi and other large cities in the country.
The lari's official exchange rate was 2.8478 lari/$1 at the close of trading on Monday, down 2.4% from Friday's close following a 1.7% decline over the previous two weeks. The currency fell to 2.8746 lari/$1 on Tuesday, but then rebounded to 2,8468 lari/$1 on Wednesday.
NBG data show that the lari fell to its lowest point this year, 2.8693 lari/$1, on June 14. It subsequently strengthened until October, when it began to weaken amid the run-up and aftermath of the parliamentary election, the results of which were not recognized by the EU or the U.S.
It was reported earlier that the NBG carried out a record amount of foreign exchange interventions to stabilize the lari in October 2024, selling $591.2 million on the market. As a result, Georgia's international reserves fell 13% or $627.5 million in October ahead of the elections, reaching a 28-month low of $4.085 billion as of October 31. The reserves have decreased by 18.5% or $924.7 million since the start of the year.
