TBC Capital reports that the Georgian Lari (GEL) has remained stable this year, supported by several factors. Accelerated conversion of deposits into GEL, or larization, has increased demand for the local currency and is expected to surpass last April’s peak by the end of November.
Net foreign exchange inflows from exports, remittances and tourism have further bolstered the currency, aided by a slowdown in imports and a temporary rise in net car exports, the first since 2013. Additionally, global weakness in the US dollar has contributed to the relative strength of the GEL.
The National Bank of Georgia has played an active role, purchasing $2 billion USD from March to November to support larization and stabilize the exchange rate. While some improvements, such as changes in car trade dynamics, may be temporary, strong inflows, larization trends and USD weakness collectively supported GEL stability and help limit exchange rate fluctuations.
