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Georgian national bank promises low inflation

08 December 2014 [14:49] - TODAY.AZ

/By AzerNews/

By Mushvig Mehdiyev

The Georgian National Bank believes there is no risk of higher inflation in the country amid lari's depreciation against dollar.

Although its current rate is the lowest one over the last four years, experts forecast a 5 percent inflation in the country.

President of the National Bank Giorgi Kadagidze said there were two reasons behind the optimistic inflation outlook. He was sure that the depreciation of the lari was caused by inside and outside factors.

"Historically, the devaluation of lari against dollar had been going on over the past seven years, while sources of the inner currency inflows were weakening. We believe that this misbalance has already been eliminated and it has subsequently reflected on the lari exchange rate,” Kadagidze said.

As of December 5, one dollar was valued nearly at 1.96lari, as it has dropped by 10.6 percent against dollar since November 18.

Latest data from Georgia's state statistics office revealed that the annual inflation rate was 2.8 percent in November, going down from 3.4 percent index in October.

Kadagidze added that the recent financial situation in Georgia revealed the excessive behavior of industry insiders, which is generally characteristic of the financial markets, to be behind the lari's devaluation.

He went on to call on the market insiders to stop taking sudden decisions on money converting.

Kadagidze vowed that the National Bank will do its best to guarantee the financial and macroeconomic stability of Georgia.

Meanwhile, Prime Minister Irakli Garibashvili met with the economic profile members of the ministerial cabinet to discuss the current financial situation in the country.

"The Georgian government has been pursuing a consistent policy, therefore, there is no worry about worsening of the financial stability and lari exchange rate in a long-term period,” he said.

URL: http://www.today.az/news/regions/137862.html

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