BAKU, Azerbaijan, November 17
By Tamilla Mammadova – Trend:
Georgia has a floating exchange rate regime that offers capacity to absorb shocks, the National Bank of Georgia (NBG) told Trend.
"However, the economic shock caused by the new coronavirus has fed increasing volatility of the foreign exchange market in 2020," the NBG said.
According to the bank, moreover, government external financing increased, while private sector Foreign Exchange (FX) inflows dried up.
"Consequently, considering the price stability mandate, NBG started more frequent FX interventions and provided liquidity to the financial market," the bank said.
As of November 30, 2020, Georgia's foreign exchange reserves amount to $3.75 billion.
The volume of reserves has decreased by $180 million compared to August of this year, which is related to foreign exchange interventions carried out by the NBG.
In total, the National Bank held 25 foreign exchange interventions and sold $843 million to mitigate the fluctuations of the lari exchange rate this year, including $513 million which was sold after August. Consequently, this means that in parallel with the implementation of interventions, Georgia's foreign exchange reserves are replenished as a result of new financial flows attracted from abroad.