Alternative opinion on floating the national currency
By Messenger Staff
Friday, May 15Recently the Georgian media has reported that international financial organizations are demanding that the Georgian Government suspend its interbank exchange, a mechanism for artificially maintaining the GEL exchange rate. They would rather see the GEL float.
Former Minister of Economy and MP Lado Papava has stated that if the National Bank stops making currency interventions the GEL rate will immediately plunge, and this will destroy the economy. In any economy stability is the major factor, every entrepreneur should know what is going to happen tomorrow, the day after tomorrow and so on. Without National Bank interventions prices will go up dramatically and thus inflation and devaluation will occur immediately.
So far the National Bank has only responded to the call by limiting its interbank operations to two trading sessions a week, rather than three as previously.