The Georgian Lari (GEL) deprecated by 1.0% m/m in June vs U.S. dollar. Year-to-date GEL gained 3.1%.
"GEL’s weakness in June is likely attributed to one-off factors, as FX inflows remain robust and NBG purchased US$ 937.6mn in 5M23," reads the recent Monthly Economic Review of Galt & Taggart, one of the leading investment banks in Georgia.
Galt & Taggart expects average GEL rate at 2.6 vs U.S. dollar in 2023.
As for the monetart policy, in June 2023, the National Bank of Georgia (NBG) kept its key rate unchanged at 10.5% on 21 June 2023 meeting, after cutting it by 50bps in May-23.
Based on communication from NBG, the authors of the publication expect further rate cut by 50bps on 2 August 2023 meeting.
"Considering disinflation trend, we see room for additional 100-150bps rate cut through end-2023," Monthly Economic Review reads.
