Page 29 - GEORptSep19

The gross external debt of Georgia amounted to $17.8bn as of end-December 2018, rising from 17.2bn in the third quarter of 2018. External debt averaged $11,420.4mn from 2007-2017, according to the National Bank of Georgia. It accounted for 109.6% of GDP. Gross external debt include both public sector (general government, public corporations and national bank) and private sector (banking and other sectors) external debt.
Georgia’s government debt is expected to inflate to 3.5% of GDP in 2017-2019, in part due to the depreciation of the Georgian lari and the high level of dollarisation of Georgia's external debt. External government debt is expected to peak at 43% of GDP in 2018.
The country's high current account deficit, which reached 13% of GDP at end-2016, is one of the important sources of external debt.
7.0 FX
Georgia - Foreign exchange rate
2013
2014
2015
2016
2017
2018
Mar’19
Jun’19
Currency (units per EUR) (average)
2.209
2.346
2.520
2.617
2.832
3.054
3.037
3.132
Currency (units per USD) (average)
1.663
1.766
2.270
2.367
2.509
2.485
2.684
2.777
Georgia’s central bank hints at more interventions to defend currency
The National Bank of Georgia on August 6 announced that it is to act “in pursuit of the long-term stability goals of the exchange rate” and, if necessary, make additional use of all available instruments, including foreign exchange interventions, to prevent high inflation.
The comment comes after the central bank came under criticism that its last forex intervention came too late.
The regulator said that under the inflation targeting regime, the goal of the central bank is to maintain long-term stability, a prerequisite for the National Bank of Georgia's mission - pricing and financial system stability. The short-term dynamics of the lari (GEL) exchange rate are influenced by many factors and must be addressed in different ways.
The GEL on August 1 slightly strengthened against the dollar, rising to 2.93 from 2.97, as the central bank sold $32.8mn of $40mn offered to banks at an exchange auction. On August 6, the local currency was trading GEL2.93 to USD.
The central bank announced on July 31 that it would sell up to $40mn as the exchange rate had reached a level “that might pose a risk to price stability” amid “the tourism-related shocks [caused by Russian sanctions in response to anti-Russia protests] and negative expectations”.
29 GEORGIA Country Report September 2019 www.intellinews.com