Page 32 - GEORptAug20

“There was a great conversation with the Prime Minister of Georgia. We talked about economics and technologies, specifically the technologies used in the government sector for efficiency and effectiveness. We discussed investments and ways in which Georgia could attract more capital investment. We also talked about the financing strategy and the financing of processes in the global markets. Overall it was a brilliant meeting. It makes us happy about everything that is happening in Georgia,” said Citigroup’s Collins after meeting Gakharia.
7.0​ FX
Georgia - Foreign exchange rate
2016
2017
2018
2019
Jan’20
Mar’20
May’20
Jul’20
Currency (units per EUR) (average)
2.617
2.832
2.991
3.155
3.203
3.360
3.486
3.498
Currency (units per USD) (average)
2.367
2.509
2.534
2.819
2.883
3.041
3.198
3.063
Georgia’s central bank again props up lari with dollar sale intervention
Georgia’s central bank, EBRD open swap line for mutual support
The National Bank of Georgia (NBG) offered $40mn for sale on June 10 in a foreign exchange auction but sold less than $30mn. ​The sale by the central bank was made at an average weighted exchange rate of Georgian lari (GEL) 3.0372 to the USD.
Since March 13, when NBG stepped in for the first time in this sales phase to support the local currency, with a $20mn sale, the national lender has sold nearly $190mn.
As a result of the latest auction, the GEL strengthened by 2.55 tetri against the dollar to GEL 3.0393 on the day.
The NBG has been carrying out currency interventions in response to the economic shock caused by the coronavirus (COVID-19) pandemic and the slump in oil prices.
Six interventions have been made in the foreign exchange market in all. Of those, four were $40mn sales.
As for the total amount of FX reserves at the central bank, they have been growing with the help of international donors. On April 31, the volume of reserves amounted to $3.47bn, namely $77mn more than at the end of the previous month.
The European Bank for Reconstruction and Development (EBRD) and Georgia’s central bank (National Bank of Georgia, or NBG) have set up a US dollar-Georgian lari (GEL) foreign exchange (FX) swap facility, enabling the former to secure reliable access to GEL liquidity and continue lending in local currency to companies that are experiencing temporary difficulties.
The parties executed the first transaction on 24 April.
The foreign exchange swap line will support the management of NBG’s FX reserves with additional USD liquidity, which the central bank can draw on when need be.
The NBG made its latest intervention on the foreign exchange market on April 27 by selling $20mn to smooth exchange rate volatility.
32​ GEORGIA Country Report ​August 2020 ​ ​www.intellinews.com