The most recent weakening of the Georgian currency is caused by “false expectations” that lari would further lose its value against U.S. dollar in autumn, PM Irakli Garibashvili said on August 19.
The lari was mostly stable for about a month till late-July, hovering around 2.24-2.26 per U.S. dollar, about 28% weaker compared to early November 2014, when lari started depreciating. But since late July lari further weakened to 2.3245 per U.S. dollar as of August 19.
Commenting on this recent weakening of lari, PM told journalists: “False expectations have been created and I want to call on everyone not to get confused by these false expectations and statements.”
“I had a conversation yesterday with the National Bank of [Georgia] and analysts from the Ministry of Finance, who are saying that we have already overcome crisis period. Initial wave of [external] shocks have already passed, and now this [recent weakening of lari] is caused by emotional statements – people have false, wrong expectation that lari will further depreciate in autumn, which is wrong. Experts and analysts believe that it won’t happen in the near future – that’s their forecast,” PM Garibashvili said.
He said that because of this “false expectation” market participants tend “to save dollars, which causes the fact that lari is not strengthening, but it will definitely happen, because those people will have to sell dollars and buy lari.”
The PM made the remarks in Adjara region while visiting a construction site of a hotel, residential apartments and shopping center complex in Batumi. Also on August 19 he opened a new 101-room hotel in Batumi and also visited Keda in Adjara, where he opened a new fruit processing factory.