National Bank of Georgia has released a statement regarding the exchange rate of GEL.
Based on the statement, the floating exchange rate regime is active in Georgia. Different internal and external factors, including expectations, negatively affect the current exchange rate of GEL.
“Information about the expected reduction of tourism flows from Russia in recent days have an impact on the currency market”, – the statement reads.
“At this stage, it is difficult to make accurate predictions, but base on initial calculations, reduction of tourism flows from Russia will have an impact on Georgian economy by 200-300 million US dollars over the rest of the year. This foreign shock is reflected on the balance sheet and, therefore, on the currency exchange rate. However, it should be taken into consideration that according to the data of the Q1 Current Account, it has been improved by about two-fold (USD 207 million) compared to the Current Account of Q1, 2018. this means that under the other equal terms, including taking the Russian factor into consideration, the external balance will be slightly better than expected,” – the NBG said” – the statement reads.
The bank says that it will apply to all necessary measures to evade high inflation in the country.