The current average exchange rate of the GEL is close to its long-term trend, as stated in the weekly update from the Chief Economist, which “TBC Capital” published today.
The analytical organization revised its forecast from pessimistic to neutral, citing higher-than-expected inflation in Georgia’s main trade-economic partner countries as the reason.
“Based on the average exchange rate of the lari, we are changing our earlier, somewhat but still pessimistic, expectation to a more neutral one. Moreover, the recent increase in international oil prices, along with Russia’s restriction of the export of oil products, is a relatively positive factor for the lari soon, due to its impact on inflation.
In our view, not to the extent that the monetary policy easing cycle will change substantially, but rather to the extent that inflation will return to target sooner than expected. This, in turn, is an argument against the additional devaluation of the lari,” the document says.
After Natia Turnava, acting president of the National Bank, made a change in the procedure for implementing sanctions regimes, the GEL depreciated. The National Bank sold a total of 57,150,000 USD in two days last week.
At the end of the week, the dynamics changed, and the GEL started to strengthen. As a result of trading on September 22, the GEL strengthened against the dollar by 0.63 tetri, and the official value of 1 US dollar was 2.6816 GEL.
By Mariam Gorkhelashvili
