In the last two weeks, the National Bank of Georgia (NBG) has sold more than 100 million US dollars on the foreign exchange market. Both sales led to a strengthening of the Lari against international currencies, particularly the US dollar and the Euro.
On October 16, the NBG sold USD 64.9 million in a foreign exchange auction. “Large one-time transactions continue to influence the foreign exchange market and affect the Lari exchange rate,” the NBG said, adding that the reason for selling the USD was to prevent excessive fluctuations.
The NBG stated that “these recent fluctuations in the foreign exchange market are not linked to macroeconomic factors and are therefore expected to be short-term.”
Earlier intervention by the National Bank took place on October 8. The NBG sold USD 48.5 million. The official reason given by the NBG was “a surge in demand for foreign currency”, which it said was putting additional pressure on the GEL exchange rate.
The last time the NBG released international reserves this year was during the protests against the Foreign Agents Law, when it sold a total of USD 168.7 in one month, more than in the whole of 2023, to shield the national currency, lari from excessive devaluation.
Both recent sales come as Georgia holds crucial elections in just over a week.
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