The National Bank of Georgia (NBG) has reviewed the current developments in the foreign exchange market.

According to the Bank, the average exchange rate of the lari against the US dollar in January edged up slightly from 2.6988 to 2.6956, compared to the previous month, representing a modest increase of just 0.1%. Conversely, against the euro, it experienced a marginal depreciation from 3.1596 to 3.1602, a change of only 0.02%.

At the end of the month, the official exchange rates stood at 2.6908 for the US dollar and 3.2088 for the euro.

The report notes that during the period, the highest value of the lari-dollar exchange rate was 2.6982, while the lowest was 2.6908.

“In January, the minimum exchange rate deviated approximately twice as much from the average as the maximum. Over the month, the Turkish lira depreciated against the dollar both monthly and annually, whereas the Armenian dram appreciated. The euro and the lari experienced a small, equal strengthening monthly, while the Azerbaijani manat remained relatively unchanged. The real effective exchange rate of the lari depreciated by 1.8% year-on-year, but appreciated by 0.2% over the month. In terms of the nominal effective exchange rate index, it strengthened by 1.0% annually and by 0.2% in January,” the National Bank explained.

Furthermore, the Bank’s report highlights that, overall, the depreciation of the effective exchange rate tends to bolster the country’s competitiveness, although it can also exert upward pressure on import-driven inflation.

“Among trading partners, inflation in January was higher in Türkiye, Ukraine, Belarus, Russia, and Azerbaijan than in Georgia, while it was lower in Armenia, the United States, and the Eurozone. A downward trend in inflation is observed in some key trading countries, though overall price levels remain elevated,” the report concludes.