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Georgian TBC Bank predicts short-term fluctuations in lari exchange rate

Business Materials 24 February 2021 12:50
Georgian TBC Bank predicts short-term fluctuations in lari exchange rate

BAKU, Azerbaijan, Feb.24

By Tamilla Mammadova – Trend:

Otar Nadaraya, the chief economist at Georgian TBC Bank, predicts short-term fluctuations in the lari exchange rate due to the unstable political situation and recommends selling reserves, Trend reports via Georgian media.

“In the short term, there may be some fluctuations, because this is a negative background. Although the deficit is large, we also have funding,” Nadaraya said, assuming the equilibrium level of the lari would be around 3.30 per dollar. The chief economist of TBC Bank also does not exclude an increase in the rate of monetary policy.

“At the last meeting on monetary policy, it was announced that inflation risks in 2021 are still high. If such a scenario develops, I think that the tightening of monetary policy is more likely than a further devaluation of the lari,” Nadaraya said.

Expert Nika Shengelia also expects the depreciation of the lari. According to him, the process of depreciation will continue until political destabilization occurs in Georgia.

In 2020, the lari depreciated against the dollar by 14.3 percent.

At its meeting on February 3, 2021, the Monetary Policy Committee of the National Bank of Georgia decided to leave the refinancing rate unchanged. The monetary policy rate is 8 percent.

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