Central Bank Continues Buying USD to ‘Replenish’ Reserves

Georgia’s central bank intervened in the foreign exchange market on the purchasing side for the third consecutive day on May 19, buying USD 20 million.

Georgian national currency, GEL, which is gaining for past three months, was trading at 2.147 per U.S. dollar by Thursday evening, stronger than 2.1628 a day earlier.

GEL has strengthened 10.7% against U.S. dollar year-to-date and it is 8.8% stronger compared to a year ago.

May 19 intervention was National Bank of Georgia’s tenth one on the purchasing side since mid March.

The central bank bought total of USD 155 million in these ten interventions between March 17 and May 19.

“I think this is a very good time to replenish some foreign exchange which we lost during the last year,” new chief of Georgia’s central bank, Koba Gvenetadze, said in an interview with Bloomberg this week.

GEL started depreciation in November 2014, weakening from about 1.75 per U.S. dollar to its all-time low of 2.4985 by late January, 2016.

Amid lari’s depreciation, the central bank made three interventions in January by selling total of USD 60 million.

Total of USD 286.96 million was sold in nine separate interventions throughout 2015 to support GEL.

Gross international reserves stood at USD 2.456 billion as of end-April 2016, just slightly over than a month earlier, and up from USD 2.43 billion a year earlier.

This post is also available in: ქართული (Georgian) Русский (Russian)