A strengthened US dollar on January 5 has adjusted the exchange rate to 1 USD to 2.7303 GEL. This was a depreciation of 6.11 tetri.
The exchange rate for the euro against the lari is now 1 to 2.8649, as the euro also strengthened.
Due to vast depreciation, the National Bank of Georgia sold 40 million USD in the second half of December. The NBG also made an official statement on December 20 that it intends to use all means and instruments at its disposal in order to limit excessive fluctuation on the foreign currency exchange market. Their statement also read that: “the current exchange rate depreciated by more than what rational expectations would suggest.”
The Georgian lari has consistently depreciated throughout the year. On December 20, the Georgian lari hit a historic record low, dipping to 2.783 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. 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.
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. The organiser of the demonstration was platform, “Defend Liberty”.
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: