Georgian National Bank to tighten monetary policy in case of fluctuations in lari’s exchange rate
Tbilisi, Georgia, Jan. 10
By Nana Kirtzkhalia - Trend:
In case of fluctuations in Georgian lari's exchange rate the country's National Bank will tighten monetary policy, the banks' president Giorgi Kadagidze said.
Explaining the reasons for depreciation of Georgian lari's rate by 10 points, Kadagidze said that in Georgia there is a floating exchange rate policy, which suggests that the rate automatically stabilizes the current processes developing in the economy, as it is called by economists.
He added that during the last two years, there was a deflationary background.
"During this period we had a moderate monetary policy. Mastering of the budget deficit was added to this in the fourth quarter of the last year, which alongside other factors, has created a pressure on the exchange rate. If we see that it all turned into inflation, then we will start tightening policy for inflation to be under the target level," Kadagidze said.
He also said the part of population which took loans in U.S. dollars, and who receive incomes in laris, are in especially difficult situation.
"That is why our policy for all these years is aimed at maximizing the availability of credit in laris. Result is evident, more than half of the credits already issued are in laris," the bank's president said.
Translated by E.A.
Edited by C.N.