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        estimated by the central bank as $1.72bn in the whole of 2019 (+10.3% y/y) and $462mn (+8.0% y/y).
  5.1.3​Capital flows
    Money transfers to Georgia to slowdown significantly over coming months
   The now bleak tourism prospects amid the COVID-19 crisis have in a matter of days reversed a gradual strengthening of the local currency driven by firming fundamentals in foreign trade and the balance of payments and tight monetary policy. ​The GEL was valued at 2.78 to the USD on March 8, when it marked a 3.2% ytd gain. In just over one week, the currency plunged by 7.2% amid the COVID-19 crisis and anxieties over lower tourism revenues. The Georgian central bank sold $20mn on March 13 in a forex market intervention but the impact of that was small. Indeed, the exchange rate remained under the 3-benchmark for a couple of days after the intervention.
The country relies on tourism besides remittances from Georgians abroad as a foreign currency source that covers its wide demand for the import of goods. In the four quarters ending last September (latest data available), net revenues from travellers were $2.6bn (gross revenues were $3.2bn). The net revenues from travel thus accounted for over 13% of GDP and offset a large part of the $3.7bn net import of goods (or foreign trade deficit).
To this, $784mn of wage remittances and $1.24bn in transfers from abroad to households (mostly wage remittances as well) are added for the four-quarter period. With the global economic slowdown particularly over coming months, wage remittances are likely to evaporate as well. The central bank was still reporting robust transfers from abroad to households for the month of February ($137.2mn versus $125.5mn in the same month of 2018) and detailed data was showing, on an optimistic note, that transfers from Italy, the European country worst hit by COVID-19, rising. But a significant slowdown in transfers from abroad is still expected and it has been quickly priced in in the lari exchange rate.
 23​ GEORGIA Country Report ​April 2020 ​ ​www.intellinews.com
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