BAKU, Azerbaijan, June 26
By Tamilla Mammadova - Trend:
Given the extraordinary circumstances that the economy is currently facing, the reserves are used for interventions on the foreign exchange market in Georgia, National Bank of Georgia (NBG) told Trend.
According to the NBG, the flexibility of the exchange rate to deal with shocks is still relevant.
"However, at the same time, considering the price stability mandate, foreign exchange interventions will be used to mitigate the excessive fluctuations of lari and to provide liquidity to the foreign exchange market," the National Bank of Georgia added.
From the beginning of 2020, the National Bank of Georgia carried out seven foreign exchange interventions selling in total $209.65 million.
In January 2020, the cost of $1 was in the range of 2.86-2.89 lari. However, with the outbreak of the coronavirus epidemic and the global oil crisis, lari hit a record low against USD and stood at 3.48 on March 27.
To stabilize Georgian lari amid its depreciation, the NBG sold $20 million at foreign exchange auction on March 13, $40 million on March 19, and 40 million lari ($13.09 million) on March 25. On April 27, the National Bank of Georgia sold another $20 million to stabilize the Georgian lari after further depreciation.
The National Bank of Georgia put up $40 million at foreign exchange auction on June 10; however, only $29.65 million was sold.
On May 21, the bank sold $40 million to stabilize the Georgian lari.
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