BAKU, Azerbaijan, Nov. 15
By Maryana Akhmedova – Trend:
Georgia recorded growth of deposits in national currency (lari) in October 2021, compared to the previous month, while deposits in foreign currency decreased significantly, Trend reports via weekly economic review of TBC Capital.
According to analytical data published by TBC Capital, there were expectations of further depreciation of Georgian lari due to recent municipal elections, however, the circumstances have changed.
As TBC Capital explains, the record high difference in interest rates between Georgian lari and foreign currency deposits should strengthen investments in Georgian lari in the context of the relative stability of the national currency after the elections.
“The increased interest in Georgian lari should also be reflected in the increase in the volume of non-resident treasury securities, although, historically, it has been more dependent on the dollar rates,” TBC Capital noted.
Inflation rate in the US in October 2021 has reached its highest level since 1990, while consumer price index increased by 0.9 percent (instead of the expected 0.6 percent) and by 6.2 percent year-on-year (instead of the expected 5.9 percent), the research said.
Thus, tightening of monetary policy in the US is expected, TBC Capital said.
“As for Georgian lari, our expectations are unchanged – the demand for Georgian lari is likely to increase, but at the same time the strengthening of the US dollar should be taken into account,” TBC Capital concluded.
---
Follow the author on Twitter: @mariiiakhm