Georgia’s Minister of Economy Dimitri Kumsishvili says that Georgia's national currency’s devaluation against the dollar in the recent days was due to the decision of the United Kingdom (UK) to quit the European Union (EU).
National currency devaluates due to Brexit
By Gvantsa Gabekhadze
Monday, June 27
The Georgian Minister said the UK’s decision influenced the pound and caused its swift devaluation against the dollar which, for its part, affected other currencies worldwide, the Georgian lari among them.
Based on the current situation, one dollar costs 2.29 GEL, when last week it ranged between 2.16-2.17 GEL.
Kumsishvili stresses the situation is “temporal” and advises the population not to act emotionally.
“In such situations, our people generally make the wrong decision. They sell their lari at the wrong time and buy the dollar. I advise them to make decisions about money when they need it and not due to any situational changes,” Kumsishvili said.
Georgian experts also say that current developments in the EU influenced Georgia’s national currency.
Analyst Paata Sheshelidze believes Georgia will not face such a dramatic devaluation of the national currency as in 2014-2015, when the lari lost almost 20% of its value against the dollar, but he says the Government and the National Bank of Georgia must take reasonable steps the shock to be temporal.
He believes Georgia must retain its open market and visa–free travel to a large number of countries to avoid the national currency’s further devaluation.
Analyst Levan Kalandadze thinks the Government should follow the policy adopted by the EU towards the UK since the latter quit the organisation.
The analyst believes that the value of Georgia’s national currency is dependent on the global situation, and Georgia must always take foreign developments into account and be prepared for possible future complications.