BAKU, Azerbaijan, June 4
By Tamilla Mammadova – Trend:
TBC Bank Chief Economist Otar Nadaraia names several factors, which strengthen the exchange rate of Georgian lari, Trend reports via Georgian media.
According to him, one of the main factors is improved foreign exchange inflows into the country.
As of the latest data, Georgia's exports increased by 70 percent and reached $378 million in April. This figure is 22 percent higher compared to the same period of 2019. Remittances rose by 145 percent to $194 million in the same month, and tourism revenue exceeded $50 million in the same month for the first time since the pandemic. These factors maintained a positive trend in May, although their statistics have not been published so far.
Nadaria notes that the strengthening of the lari exchange rate is also related to the increase of the monetary policy rate in lari and grown foreign currency lending by the banking sector. According to him, foreign currency lending became active in April. Nadaraia declares, that this is a risk in itself, but in the current situation, it is equivalent to foreign exchange intervention and helps to strengthen lari.
The Government of Georgia has revised the 2021 economic growth target, taking into account the improved economic parameters.
According to Geostat, the Georgian economy grew by 44.8 percent in April. Under these circumstances, the economic growth target will increase from 4.3 percent to 6.5 percent. It is expected that the increased economic activity is currently having a positive effect on the lari exchange rate.
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