Economists link drop in lari exchange rate with protests in Tbilisi

The fall in the lari exchange rate is caused by expectation of major financial losses from the decrease in tourist flow from Russia, the National Bank of Georgia has stated.

The "Caucasian Knot" has reported that the exchange of the Georgian national currency – lari (GEL) – is decreasing. Thus, from May 21 to May 28, 2019, the value of one US dollar increased from 2.7470 to 2.7876 laris, reaching the historical minimum for the Georgian currency.

The national currency exchange rate was influenced by expectation of a decrease in tourist flows from Russia, says a statement posted on the website of the National Bank of Georgia on June 27. "At this stage, it is difficult to make an accurate forecast; however, according to preliminary estimates, the reduction of tourist flows from Russia in the remaining period of the year will affect the economy of Georgia by about USD 200-300 million. This external shock will affect the balance of payments and, accordingly, the exchange rate," the National Bank of Georgia has stated.

Georgia can avoid the expected losses from the reduction of tourist flows from Russia, if more tourists from other states arrive in the country, Koba Gvenetadze, the President of the National Bank of Georgia, stated on air of the "Rustavi-2" TV Channel.

This article was originally published on the Russian page of 24/7 Internet agency ‘Caucasian Knot’ on June 29, 2019 at 10:48 am MSK. To access the full text of the article, click here.