Page 31 - GEORptNov18

the end of 2017 versus the euro. On a broader perspective, however, the lari has persistently weakened on a gradual basis over recent years.
The depreciation of the local currency was caused by “false expectations”, the central bank’s Kikoria stated.
"We do not think that there is a serious factor causing the currency fluctuation we have today. Our response strategy to this process is reduction of dollarisation. Our main mandate is inflation. So, under lower inflation and a decreased number of loans in foreign currency, the instability of the currency will have a smaller effect on the population, " Kikoria added.
Nonetheless, the current account has for years remained a constant concern in terms of the small country’s macroeconomic stability. The current account gap is set to grow to 10.5% of GDP this year from 8.9% of GDP in 2017, while remaining in the double digits at 10.2% of GDP in 2019, under the latest projections of the International Monetary Fund. Earlier in April, the Fund expected the country’s external deficit to narrow to only 9.5% of GDP this year.
31 GEORGIA Country Report November 2018 www.intellinews.com