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IMF reveals who are mostly affected by depreciation of Georgian currency

Business Materials 18 September 2019 14:04 (UTC +04:00)

Baku, Azerbaijan, September 17

By Tamilla Mammadova – Trend:

The depreciation of the lari in Georgia has especially affected those who have loans in foreign currency, said the head of the mission of the International Monetary Fund (IMF), Deputy Division Chief Mercedes Vera-Martin Trend reports with reference to 1tv.ge.

The IMF mission was in Georgia on September 11-17. Meetings were held with Georgian Prime Minister Georgi Gakharia, ministers of the economic bloc, the President of the National Bank of Georgia Koba Gvenetadze and representatives of the private sector. The economic situation in Georgia, the implementation of the expanded financing mechanism program and key fiscal indicators for 2020 were discussed.

“The IMF team admits that the depreciation of the lari has affected households and businesses in Georgia in recent months, especially those who have loans in foreign currencies. However, exchange rate flexibility allows the economy to cope more easily with shocks,” said Vera-Martin.

According to her, the IMF welcomes the policy of the Georgian government to carry out structural reforms and supports the actions of the National Bank of Georgia.

“In response to inflation, the National Bank increased the refinancing rate by 50 basis points in September, noting that the rate could increase even more if inflationary pressures persist,” she noted.

The IMF says that tax revenues to the budget are stable, although they are offset by a reduction in the excise tax on tobacco.

The IMF noted the importance of continuing reforms in the Georgian pension system, as well as the importance of educational reform.

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