The head of Georgia’s National Bank (NBG), Koba Gvenetadze, says until the national currency – the lari – is not a priority when taking loans or buying properties the dollarization process is less likely to stop.
National currency should be priority
By Tatia Megeneishvili
Friday, July 22
Gvenetadze made his remarks to the Rezonansi newspaper and stressed that both the NBG and the Government of Georgia should work jointly, and the lari and not the dollar should eventually become the preferred currency n Georgia.
“The public attitude through which the dollar is a more reliable currency comes from the 90s, as at that time the national currency suffered from severe depreciation, and people had to live in hard socio-economic conditions. Despite the fact that the situation changed and the national currency became stronger this attitude still remains,” Gvenetadze said.
“We must get used to living without dependence on the dollar, as otherwise shakes in currencies affecting people will be inevitable,” Gvenetadze added.
Gvenetadze stressed the NBG has already taken steps in popularization of lari and appealed to the Government to support the initiative.
“If we are no longer dependent on the dollar, changes in its values wouldn’t be so painful for our people. Big loans and large-scale real estate should be taken or bought in lari, not in dollars,” Gvenetadze added.
The NBG head forecasted that if the country failed to prioritize its national currency, the lari devaluation process might become more complicated and painful.
He underlined that keeping the lari up artificially would not improve the situation.
“Sometimes, when a devaluation process starts, people protest to the NBG, which is the completely wrong approach. There are moments when it is hard to speak about reasons behind currency fluctuations, because the factors behind them may be different. However, the NBG can use its resources and slow down the process, but it will create even more problems in the future if we do this permanently,” stated Gvenetadze.
He explained that the NBG's involvement in stabilizing the lari was appropriate only in very concrete or emergency situations. .