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Irakli Kovzanadze relates depreciation of GEL to psychological factor

Publish Time 2017-09-06 14:39:00

Irakli Kovzanadze, Chairperson of the Parliamentary Finance and Budget Committee, explains depreciation of the GEL by psychological factor. 

Kovzanadze responded to the depreciation of the GEL at the plenary sitting of the Parliament and stated that there is no fundamental macroeconomic basis for the devaluation of the national currency.

According to Kovzanadze, at the end of August, the participants of the currency market carried out additional purchases under low-cost conditions, which excessively affected the exchange rate.

"This event has a temporary and short-term nature. There is a free exchange rate in Georgia and that is why the movement can be bilateral – both strengthening and devaluation of the GEL. Throughout the summer the population of Georgia saw that the currency was strengthening. The National Bank of Georgia did not allow sharp strengthening of the GEL. Nearly 110 million dollars have been purchased. The NBG reserves were filled, which supported financial and monetary stability in the country. As for the situation in the last period - the end of August and the beginning of September, this can be explained by a psychological factor. 

As you know, there was a general expectation that in the summer the GEL would be strengthened, while it would be depreciated in September. At the end of August, the participants of the currency market carried out additional purchases under low-cost conditions, which excessively affected the exchange rate,” Kovzanadze said.





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