Lasha Kavtaradze, an economist at Galt & Taggart, expects Georgia’s international reserves to rise to $4.9 billion by the end of the year. He attributes the recent annual decline in reserves, recorded in May, to government debt repayments.
“Reserves have increased to $4.6 billion. Since March, when the National Bank resumed purchasing U.S. dollars on the foreign exchange market, reserves grew by $66.7 million in April. We don't yet have May data, but the increase is likely to be similar. However, this was not fully reflected in the total reserves,” Kavtaradze explained.
“One component of the reserves is gold, and when gold prices rise, so does the value of reserves. This did not occur in May, contributing to a slight decline. The main reason was the government’s debt repayments. Still, we believe that, given the global weakening of the dollar, the National Bank will be able to continue accumulating reserves. If conditions remain stable, reserves could approach $5 billion by year-end,” he added.
