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Finance Minister explains why lari depreciated then strengthened again in short period

Monday, December 5
Georgia’s Finance Minister Dimitry Kumsishvili has explained the national currency’s dramatic depreciation two days ago with what economists call "supply shock”.

Kumsishvili said that the depreciation was caused by some wrong decisions made by private sector players.

"When we started to analyze the market we found out that there was no increased demand and the demand was exactly the same as in previous days. But some people, companies or other economic subjects decided just not to sell USD,” Kumsishvili said.

"This caused a very fast rising movement but as soon as the right communication and prompt information exchange took place the market was regulated by itself.”

The Minister believed that the Lari strengthened in the second half of the day thanks to the right coordination by the state.

"Also, the statement by the National Bank was very timely,” Kumsishvili said.

Yesterday, the National Bank of Georgia advised Georgian citizens and all economic players in the Georgian market not to make quick decisions as they were likely to end in loss as the price of the USD in Georgia was exaggerated at that moment.