Prime Minister of Georgia, Giorgi Kvirikashvili, spoke about the depreciation of the lari (GEL) today at a government meeting and explained that the problem is linked to external factors. He mentioned that Georgia is located “in a geographical region in which all the currencies of our partner countries are devaluing [as well].”
He added that the Ukrainian hrivna have, in recent years, devalued by 200%, the Russian ruble by 90% and the Azerbaijani manat by more than 100%. The Prime Minister did, however, say that Georgia’s economic growth continues to show promise, and that the country must think about its future.
The Georgian lari has been steadily depreciating over the course of the last month. According to the National Bank of Georgia, the exchange rate is now 1 US dollar to 2.664 GEL. The lari against the euro has reached an exchange rate of 2.83.
On November 15, the Government of Georgia issued an official statement regarding the instability of the Georgian lari (GEL). The regulations aim to reduce the number of foreign loans and deposits, also known as “de-dolarization.”
The government added that such an approach was unlikely to have negative effects on the economy, and that a reduction in next year’s State budget would contribute to the efficacy of the planned measures.
In the chart below you can see the cost of the Georgian lari against the euro and the US dollar throughout the year of 2016: