According to the National Bank of Georgia, the Georgian national currency has begun to rebound in the past few days. The cost of 1 US Dollar is now 2.64 GEL, which is 2 tetri less than the previous indicator. The lari also strengthened by 2.9 tetri against the euro.
The National Bank of Georgia sold 40 million USD in order to stop the lari’s quick depreciation. The NBG also published a statement saying that it is ready to use all tools and mechanisms at its disposal to stop the lari’s floating condition.
Previously, the National Bank of Georgia stated that “the current exchange rate has depreciated by more than [our] rational expectations would have suggested.”
They have also said that In case of a risk to price stability in the medium term, the National Bank would tighten the country’s monetary policy.
On December 17, civil society activists gathered in front of the Chancellery of the Government of Georgia in order to protest the depreciation of the Georgian currency. Protesters decorated a christmas tree with lari banknotes with Bidzina Ivanishvili’s face.
The organiser of the demonstration was platform, “Defend Liberty”.
On December 22, the Georgian lari hit a historic record low, dipping to 2.7846 GEL to the US dollar. According to the National Bank of Georgia, throughout 2016, the GEL was the strongest against USD on June 10, when the exchange rate of 1 USD against the GEL was 2.127. THe NBG also said that these processes can be ascribed to the combination of the dollar’s rise in value and the depreciation of the Turkish lira.
In the chart below you can see the value of the Georgian lari against the euro and the US dollar throughout the year of 2016: