09.Feb .2022 18:00

BAG Responds To GEL Strengthening

BAG Responds To GEL Strengthening
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Georgian Business Association responds to the strengthening of GEL exchange rate.

“Georgian Business Association welcomes the process of strengthening the national currency. We would like to emphasize that the strengthening of the GEL and the its further stability is an important process for the business sector, as well as, with our deep conviction, for our country and its citizens.

According to the results of all other types of research conducted by the BAG Index or the Association, depreciation and volatility of the GEL have been considered as one of the hindering factors for the business activity. It had a very negative effect on the financial condition of the companies, hindered their growth and development and threw the financial statements of the companies in a difficult and unattractive situation.

We hope that this challenge, which the business sector has been facing for quite a long time, will be overcome and the current dynamics of lari strengthening will continue. It is clear to everyone that strengthening GEL exchange rate and its further stability will lead to the improvement of all macroeconomic parameters, including helping to curb inflation.

Moreover, strengthening of GEL and stability of the exchange rate will have a positive impact on the purchasing power of the consumers and it will also create positive attitudes in economic agents, which in turn will increase economic activity. It is also worth mentioning that according to the Georgian Business Association, GEL exchange rate is not a determinant of the country's competitiveness in the reality of Georgia, and its depreciation and instability create a heavy burden on business and, consequently, the economy.

Depreciation of GEL and its instability, naturally, had a negative impact, as well as the attraction of local and foreign investments. Against the background of maintaining the dynamics achieved today, we will definitely get activation from foreign investors.

We hope that the positive sentiments caused by the strengthening of the GEL in business will continue. We call on the Government of Georgia and the National Bank of Georgia to use all the tools at their disposal, which will make it possible to ensure the irreversibility of the situation. Without a sharp deterioration in external factors, in the context of a consistent, purposeful economic and monetary policy within the country, we fully believe in maintaining the strength and stability of GEL”, BAG’s statement reads.