PM Irakli Garibashvili and his economic team met central bank chief Giorgi Kadagidze on Monday evening as the Georgian currency lari (GEL) weakened to near its record low.

Lari fell to 2.4499 per U.S. dollar, according to central bank’s official exchange rate set for Tuesday, approaching its all-time low of 2.451, recorded in February, 1999.

Lari has lost 2% of its value against U.S. dollar in a week and it is 40% weaker compared to September, 2014.

Exchange kiosks in Tbilisi were selling dollar for about GEL 2.46 as of Monday evening.

Minister for Regional Development and Infrastructure, Nodar Javakhishvili, who was Georgia’s central bank chief in 1993-98, said in a newspaper interview published on September 21, that the Georgian economy “will not withstand” if lari hits 2.54 mark per dollar.

Such a scenario, he told the weekly Kviris Palitra, is fraught with the risk of public uproar in the country where up to 64% of total loans are denominated in foreign currency, mostly in U.S. dollar.

Along with the president of National Bank of Georgia, Giorgi Kadagidze, the meeting with the PM was also attended by Finance Minister Nodar Khaduri; Economy Minister Dimitri Kumsishvili, and secretary of PM’s economic council Giorgi Gakharia.

“According to forecasts by both the National Bank and the Finance Ministry, stabilization of lari should start in the medium term period,” said PM Garibashvili, who was saying a month ago that it was “wrong expectation that lari will further depreciate in autumn.”

“They [the central bank, the finance ministry] will use all the instruments at their disposal and control the situation maximally,” the PM told journalists after the meeting. “The most important is to keep calm and not to yield to fuss and emotions. I want to appeal to parliamentary and non-parliamentary opposition, as well as non-governmental organizations and experts that in this [situation] we should all remember about our country’s interests. Making irresponsible statements about the national currency is inadmissible.”

The PM also said that the Finance Minister will revise budgetary parameters and the central bank will intervene on the foreign exchange market if necessary.

The central bank chief, Giorgi Kadagidze, said that “the exchange rate has reached its peak” and no further pressure on lari is expected.

“But if the pressure intensifies we are ready to carry out more aggressive monetary policy… that implies use of all the instruments at our disposal, among them, currency interventions if necessary,” Kadagidze said.

Georgian central bank’s foreign currency reserves stood at USD 2.26 billion as of end-August.

The last time when the central bank intervened on the foreign exchange market was in late April, 2015, selling USD 40 million; before that the central bank sold USD 160 million in four separate occasions this year.  

Finance Minister Nodar Khaduri said, that those macroeconomic factors that were mounting pressure on lari are “now fully exhausted” and therefore “we expect appreciation of lari in medium term period.”

He also said that neither budgetary expenditures, nor central bank’s refinancing loans had a role in lari’s depreciation. Some lawmakers from the GD ruling coalition have been blaming central bank for having negative effect on lari, including through its refinancing loans.

Georgia’s external earnings in a form of exports and remittances continued its downward trend in August.

Remittances stood at USD 84.4 million in August, which is 45.67 million less than in August of last year.

Money transfers from abroad to Georgia in the first eight months of 2015 were down by 26% year-on-year to USD 714.3 million, caused by falling remittances from Russia and Greece, which are Georgia’s two largest sources of remittances.

Exports fell 23.4% year-on-year in August to USD 190 million. In the first eight months of 2015, exports were down by 23.7% year-on-year to USD 1.45 billion. Imports fell by 10.2% y/y in Jan-Aug, 2015 with trade deficit decreasing by 3% y/y to USD 3.47 billion in the first eight months of this year.