By Messenger Staff
Wednesday, December 17The GEL officially maintains a rate of 1.65 against the USD. The National Bank of Georgia has declared however that the rate could be left to float according to demand and supply equilibrium.
When just one month ago the GEL fell the NBG made a promise to keep the new rate stable till the end of the year. So far the promise has been kept and the GEL is still more or less stable against the USD. However it is observed that although until recently people were accumulating GEL and opening accounts in the national currently people now tend to accumulate USD.
If the GEL is floated we can expect a gradual devaluation of it. Economic analysts predict that a balanced and realistic base rate of the GEL against the USD would be 2 GEL to 1 USD.
Traditionally the devaluation of a national currency encourages exports but so far in Georgia there is not much tendency for export increase. Georgia has a negative trade balance, import exceeds export by GEL 3.8 billion.