Page 38 - GEORptApr21

spread of the coronavirus, something which has also had an impact on the standing of the Georgian lari (GEL).
The opposition parties that won parliamentary seats in the election have agreed to boycott the legislature, accusing the ruling Georgian Dream party of having rigged the poll. With 74 seats after the first round of voting, Georgian Dream is close to gaining more than 50% of parliament’s seats, with a second-round ballot scheduled for November 21. Seventeen of the parliament’s 150 seats are to be distributed following a second round applicable to single-mandate majoritarian constituencies.
Besides the political turmoil, the second wave of the coronavirus pandemic in Georgia and abroad has played a role in the lari’s weakening, with tightened restrictions set to result in a slower economic recovery and thinner tourism revenues—particularly important for the balance of payments severely hit this year.
The National Bank of Georgia (NBG) pointed to exchange rate issues—due to the still high dollarisation seen in the economy, room for easing monetary policy is limited.
In a press conference after the monetary policy committee met, NBG president Koba Gvenetadze confirmed that the central bank would carry out foreign exchange interventions before the end of this year and in the first half of 2021 if necessary.
Since the beginning of 2020, the central bank has provided $886mn to the market. The regulator would continue to intervene depending on the market situation, Gvenetadze said.
He reiterated that the purpose of the interventions are not carried out to maintain the national exchange rate at a specific rate.
"The course must go in the direction determined by the economy. The purpose of the interventions is to ensure the supply of foreign currency to the market, while the market has suffered a loss; just to name tourism as an example, where there is a huge loss this year and [the interventions] are done to prevent market misconduct," said Gvenetadze.
38 GEORGIA Country Report April 2021 www.intellinews.com