NBG Vice President says if devaluation of GEL continues National Bank will use currency interventions

If the tendency of devaluation of GEL continues, we will use currency interventions, as well as the tightening of monetary policy, appropriately, we will not allow inflationary pressures in the medium-term period, - Archil Mestvirishvili, Vice President of the National Bank of Georgia, told reporters when speaking about depreciation of the national currency’s exchange rate.

According to Mestvirishvili, if the GEL depreciation trend continues, the National Bank will use the appropriate tools to avoid inflation. The NBG Vice President noted that depreciation of the GEL is associated with the Russian tourist embargo.

“If we discuss the currency market and the factors that influence the exchange rate, the current account deficit tended to improve in the first quarter and it continues improvement in the second quarter, too. The real gross domestic product growth rate in June has been published today and it’s quite high. In addition, trade deficits are improving, money transfers are growing, but the embargo on tourists from Russia has raised negative expectations, declined tourism revenues, which has affected the foreign exchange market. However, in our estimation, the nominal effective exchange rate, we are observing at the moment, is more depreciated than it is indicated by the size of the external shock. We are closely bserving the foreign exchange market and in order to avoid inflationary pressures on the exchange rate in the medium term, we will use our available tools if the depreciation trend of the GEL continues, "Mestvirishvili said adding that when the National Bank considers it necessary to interfere it will start interventions.