There is no expectation of a sudden depreciation in the exchange rate of the GEL [Georgian national currency – Lari]. Such a statement made Natia Turnava, the Acting President of the National Bank.

“The USD has recently strengthened against the EUR and all other currencies, including the GEL. In terms of the GEL’s exchange rate, we don’t see any extraordinary developments at this time. Comparing November and December [2024], there has only been a 5-6% depreciation of the GEL against the USD. This is unlike the election period, where high demand for USD posed a risk of sudden GEL depreciation, prompting our intervention.

Currently, the GEL is fluctuating healthily within a certain range. If we take this week, it strengthened on Monday and Tuesday, depreciated slightly yesterday, strengthened again today, and so on.

The foreign currency inflows into the country are stable and indicated a preliminary increase in tourism revenues. And stable foreign currency inflows are crucial. Tourism revenue plays a significant role in this context.

According to preliminary data, we are observing growth both in tourist numbers and in revenue. It is challenging to predict the GEL’s exchange rate under a floating rate policy as opposed to a fixed exchange rate policy. Inflation remains our primary concern, as stipulated in our regulations.

The overall price level consists of both domestic and imported goods and services. The prices of imported goods are directly tied to the GEL’s exchange rates against EUR and USD. If GEL depreciates consistently over time, it may lead to increased costs for imported goods. For example, as commodity prices such as oil/cooking oil rise, this is reflected in overall pricing. Fortunately, our domestic prices have remained below target inflation rate of 3% for several months”, - said Turnava.