The National Bank of Georgia sold USD 40 million at a foreign currency auction on December 20 to support lari (GEL), Georgia’s national currency.

Despite the intervention, GEL fell again and reached 2.7831 against USD on Tuesday. GEL was trading at 2.7412 against dollar a day earlier. Exchange kiosks in Tbilisi were selling dollar for about GEL 2.81-2.82 as of Tuesday. 

In a statement released on Tuesday, the National Bank said that the reason for lari’s recent depreciation against U.S. dollar is the combination of fundamental factors (global appreciation of USD, depreciation of Turkish Lira) and expectations. It also noted that despite the fundamental factors, the current exchange rate depreciated by more than what rational expectations would suggest.

The National Bank last intervened on the currency market on October 12 – since then the Georgian currency has lost 19% of its value against dollar.

Since the start of 2016, NBG sold a total of USD 280 million and bought USD 278.35 million in 24 currency market interventions.

Gross international reserves stood at USD 2.779 billion as of November, up from USD 2.760 billion a month earlier and from USD 2.479 billion a year earlier.