The analyst explains strengthening of GEL with seasonality and tightening of monetary policy
Gia Chkopoia, business analyst at Georgian-American University, explains recent appreciation of lari with seasonality and tightening of monetary policy by the National Bank.
As Chkopoia told BM.Ge, remittances have also increased and it led to a positive trend, but according to him, despite the strengthening of the national currency, this will not have an impact on the prices in the short-term.
“The tendency of GEL strengthening is supported by fundamental factors such as increased currency inflows. The New Year is characterized with growing inflows. A positive balance is maintained between transfers and remittances. The same can be said about the export, while imports have fallen comparing to the same period of the last year. These factors, as well as the tightening of monetary policy, had a positive effect on the appreciation of GEL. As a rule, we are not overwhelmed by the right steps from the NBG, though the refinancing rate hike was definitely right. This will not have a short-term effect on inflation; this may be reflected on the prices in the future, although it is difficult to say clearly in the long run against current economic policy; We do not know what we will encounter on the way”, Chkopoia said.
