GEL Continues Depreciation

Georgian national currency, lari (GEL) hit a record low against U.S. dollar after falling to 2.6599, according to the central bank’s official exchange rate set for Wednesday. GEL was trading at 2.6154 against dollar a day earlier.     

Exchange kiosks in Tbilisi were selling dollar for about GEL 2.68-2.70 as of Tuesday.

GEL’s previous all-time low of 2.5026 per U.S. dollar was recorded on November 25.  Since then Georgian currency continues depreciation on a daily basis.

Economy Minister Giorgi Gakharia cited external factors as the reason behind recent GEL depreciation. “This is a short-term issue; we expect stabilization,” he said.

The National Bank of Georgia (NBG) last intervened on the currency market on October 12 – since then the Georgian currency has lost 13.8% of its value against dollar and 51% since November 2014, when GEL started depreciation.

Since the start of 2016, NBG sold a total of USD 240 million and bought USD 278.35 million in 23 currency market interventions.

Gross international reserves stood at USD 2.779 billion as of November, up from USD 2.760 billion a month earlier and from USD 2.479 billion a year earlier.