In the last two week, the National Bank of Georgia has sold over 100 million US Dollars on the foreign exchange markets. Both sales resulted in a strengthening of Lari against other currencies, notably the US dollar and Euro.
On October 16, the NBG auctioned USD 64,9 million at a foreign exchange. The NBG stated that “large one-time transactions continue influencing the foreign exchange market, and affect the Lari rate of exchange”. They added that the USD was sold to prevent excessive fluctuations.
The NBG stated, “These recent fluctuations in the Foreign Exchange Market are not linked to macroeconomic variables and are therefore expected be short-term.”
The National Bank had already intervened on 8 October. The NBG sold USD 48,5 million. The NBG cited “a surge in foreign currency demand” as the official reason for the sale. This, it said, was adding pressure to the GEL exchange rate.
The NBG sold USD 168.7 worth of international reserves in one month during protests against the Foreign Agents Law. This was more than it sold in 2023. It did this to protect the national currency lari from an excessive devaluation.
Both sales are coming as Georgia prepares for crucial elections in less than a week.
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