Baku, Azerbaijan, October 1
By Tamilla Mammadova – Trend:
The real effective exchange rate (REER) in Georgia depreciated by 4.1 percent in July compared to June, and by 11.7 percent relative to the same month of the previous year, Trend reports with reference to ISET-PI, a think-tank based at International School of Economics of Tbilisi State University.
The nominal effective exchange rate (NEER) depreciated by 4 percent monthly and 11.7 percent yearly. The depreciation of REER and NEER is typically associated with reduced value of domestic exports in the very short-run period and gaining competitiveness of export production in foreign markets later, the report said.
Notably, the lari real exchange rate depreciated with respect to the national currencies of the major trading partners. The lari/try and lari/rub real exchange rates depreciated compared to the same month of the previous year by 8.7 percent (depreciated by 6.7 percent monthly) and 14.3 percent (depreciated by 4.9 percent monthly) respectively.
In addition, the lari real exchange rate experienced a notable depreciation against the USD and the euro (falling on average by 3.4 percent and 2.3 percent respectively in monthly terms).
Overall, REER-related variables had a small negative contribution to the second quarter real GDP growth projections.