BAKU, Azerbaijan, April 21
By Tamilla Mammadova – Trend:
This year Georgian central bank will have to carry out the same intervention volume as in COVID-19 pandemic 2020, said the Chairman of the Finance and Budget Committee Irakli Kovzanadze, Trend reports via Georgian media.
According to Kovzanadze, the government's debt is 60 percent of GDP, which means that the state does not have its own revenues and expenditures and allocates amounts from foreign financing.
As he noted, there is a real threat to macroeconomic stability amid such a high deficit (7.5 percent). All this can cause monetary fluctuations and the lari’s devaluation.
"Last year the National Bank used more than $900 million of reserves. I expect the same intervention volume will be carried out this year to maintain stability, but it will not be enough and will have to raise the refinancing rate, and in my opinion, the Central Bank is late with this," Kovzanadze notes.
Kovzanadze believes everything should be done to prevent these risks in the order they not to turn into social and political.
"The central bank, which is politically independent, should be bold in its budget planning, budget deficit planning, and other parameters as well as in relation to the Ministry of Finance," he said.
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