Galt&Taggart economist Lasha Kavtaradze considers that GEL exchange rate has a slight pressure due to the refinancing rate reduction by 0.75 percentage points by the National Bank of Georgia (NBG).
Accoridng to the economist, sharply softened monetary policy and adjusted interest rates may encourage foreign currency deposits.
"I was more in favor of a pause, because when the monetary policy is softened suddenly, some pressure may come on the lari exchange rate. Many people look at the rates in foreign, as well as national currencies. Many people don't want to take the risk of GEL and prefer to take out or open deposits in foreign currency. When a slight pressure arose, we saw it on the exchange rate of the lari", says the economist.
According to his assessment, if the current GEL exchange rate is maintained against the USD, there will be no pressure on prices from the exchange rate, and the decrease in the refinancing rate will have a positive effect on the economy.
