The National Bank of Georgia said it sold USD 40 million at a foreign currency auction as Georgian currency lari (GEL) fell to 16-year low against U.S. dollar on April 28.

Lari fell by slightly over 1% on Tuesday and was trading at 2.3087 per U.S. dollar – its lowest level since March, 1999.

Lari lost 31.6% of its value against U.S. dollar since early November, 2014 when the Georgian currency started depreciation.

Selling of USD 40 million on Tuesday was the Georgian central bank’s fifth intervention this year after selling total of USD 160 million on four separate occasions (USD 40 million each time) in February and April.

In mid-April Fitch ratings agency revised outlook on Georgia down from ‘positive’ to ‘stable’ and affirmed country’s sovereign rating ‘BB-‘, three notches short of investment grade. The ratings agency said that multiple external shocks following downturn in Russia had “a highly adverse impact” on Georgia with falling exports and remittances and depreciation of the national currency lari.

Exports from Georgia declined by 27.7% in the first quarter of 2015 compared to the same period of last year to USD 502.9 million and remittances were down by 22.8% year-on-year to USD 249.6 million in the first quarter.

PM Irakli Garibashvili told journalists on April 28 that depreciation of lari is caused by external factors; he also said that despite of difficult situation in the region, Georgia’s economy continues to grow. He said GDP grew 3.1% year-on-year in the first quarter. “If you look at the situation in the region you will see that this [figure] is exceptional,” PM Garibashvili said, adding that it was a result of “efficient” work of government members. 

Although in February government said it would cut 2015 GDP growth forecast from 5% to 2%, budget parameters are still set at 5% growth outlook.