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GEORGIAN LARI AND ARMENIAN DRAM RECOVER AFTER SLUMP
Democracy & Freedom Watch
Dec 10 2014
by DFWatch staff | Dec 10, 2014
TBILISI, DFWatch-The currencies of Georgia and Armenia are recovering
after a slump of more than 10% in the last few weeks.
The sight of money exchanges trading US dollars for more than two
Georgian lari (GEL) set off a fervent debate in Tbilisi.
Many blamed the government for the fall of the lari, but Financial
Times published a table which shows that the drop was almost exactly
matched by a similar downturn in the price of Armenian dram, and
quoted an analyst who explained the incident as an effect of Russia's
economy slowing down.
Prime Minister Irakli Garibashvili on Tuesday blamed the National
Movement for attempting to create panic, but said there are external
causes for the lari's fall, such as a strengthening of the US dollar.
"We must also underline the difficult economic and political situation
in the region, which has had an important influence on our trade
balance."
Georgia has a relatively small economy and the currency is allowed
to float as investors on the foreign exchange market place bets on
how the country will perform. The National Bank will intervene only
in order to maintain a stable inflation rate, with targets set at 6%
in 2014, and 5% in 2015.
Georgia and Armenia's currencies have had an almost identical price
swing in recent weeks. Analyst Timothy Ash in Standard Bank explained
to the FastFT team that the fall of the lari and dram may have been
caused by the fall in the Russian economy, which Georgia too has become
more integrated with, following a recent thaw in economic relations.
Russia's economic woes may also have led to less money being sent
home by emigrants from the two countries, so-called remittances,
he wrote in an analysis.
Garibashvili said he is confident his country's economic growth will
surpass 5% this year, referring to a projection by the World Bank.
http://dfwatch.net/georgian-lari-and-armenian-dram-recover-after-slump-22000
Democracy & Freedom Watch
Dec 10 2014
by DFWatch staff | Dec 10, 2014
TBILISI, DFWatch-The currencies of Georgia and Armenia are recovering
after a slump of more than 10% in the last few weeks.
The sight of money exchanges trading US dollars for more than two
Georgian lari (GEL) set off a fervent debate in Tbilisi.
Many blamed the government for the fall of the lari, but Financial
Times published a table which shows that the drop was almost exactly
matched by a similar downturn in the price of Armenian dram, and
quoted an analyst who explained the incident as an effect of Russia's
economy slowing down.
Prime Minister Irakli Garibashvili on Tuesday blamed the National
Movement for attempting to create panic, but said there are external
causes for the lari's fall, such as a strengthening of the US dollar.
"We must also underline the difficult economic and political situation
in the region, which has had an important influence on our trade
balance."
Georgia has a relatively small economy and the currency is allowed
to float as investors on the foreign exchange market place bets on
how the country will perform. The National Bank will intervene only
in order to maintain a stable inflation rate, with targets set at 6%
in 2014, and 5% in 2015.
Georgia and Armenia's currencies have had an almost identical price
swing in recent weeks. Analyst Timothy Ash in Standard Bank explained
to the FastFT team that the fall of the lari and dram may have been
caused by the fall in the Russian economy, which Georgia too has become
more integrated with, following a recent thaw in economic relations.
Russia's economic woes may also have led to less money being sent
home by emigrants from the two countries, so-called remittances,
he wrote in an analysis.
Garibashvili said he is confident his country's economic growth will
surpass 5% this year, referring to a projection by the World Bank.
http://dfwatch.net/georgian-lari-and-armenian-dram-recover-after-slump-22000