Otar Nadaraia, the chief economist of "TBC Capital" declares, that the strengthening of GEL exchange rate, which occurred during October, indicates that the net currency inflows have improved in the country.
"Net currency inflows improved for the second month in a row in October, in line with our expectations. Indeed, as we underlined last week, the current slight but continued GEL appreciation must be an indication of balanced-out pressures on the exchange rate despite the still adverse
impact of seasonality-related sentiments driving higher FC deposit growth relative to the National Currency and the elevated USD yields.
Again, while the relevant data is not yet available, based on historical behavior, we do not recall episodes of the GEL strengthening being driven by the central bank interventions, which usually are rather smoothing only, or under the often-used IMF language also for the floaters – curbing the unduly fluctuation", - reads the document published by TBC Capital.
