Value of national currency fail expert explanations
 Tbilisi 17:56 - 27.06.16 «GHN»
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Roman Gotsiridze, member of UNM names reasons for sudden tumbling of the GEL. He tells despite of the government prognoses there are not signs for GEL's stability.

"The national currency again in the instability zone is, that started two weeks ago. I can tell several reasons are there:

Mistakes of the National Bank of Georgia that groundlessly and too early softened the monetary policy. Because incorrectly was estimated the short term process of the raise of the domestic currencies rate against USD. Three rapid steps were erroneously taken after this in addiiton: The refinancing rate was decreased, minimized the reserve norm of the domestic currency in commercial banks, and raised the rate for the foreign currency.
The government, as usual was spending a budget, misappropriation of state budge was traditional again, that caused lagging back in infrastructure and other works. For the last period the rehabilitation- reconstruction works accelerated, as a result the deficit that appeared in a difference between the incomes and spending was filled with left over sums. For today, this sum amounts to 290 bn.

Despite investments were increased, as seems they have only a material form, than a financial. As it was in case of Shah Deniz-2 gas field. This could not fill the deficit in foreign currency.

The export decreases again, this evident is. Also as a result of the seasonal works the import probably increased (we have not yet statistics on this matter).
The income from tourist inflow reached a maximum. However, this cannot cover the current excess demand for foreign currency.

Also we should not exclude the possibility that some gross business subject has a high demand for the foreign currency in this short period of time. This was not balanced by the supply in a short term. However if so, the NBG would react to this and return the market, but as seems the problem far serious is.

The problem a weak economic growth; the incorrect governmental policy in economic growth; and in the absence of the crisis management plan in foreign currency demand is.



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