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Thursday, 16 August 2018


Why dollar is cheapening in Georgia?

27.05.2013  |  18:56

Why dollar is cheapening in Georgia?. 29455.jpeg

Over the last week the U.S. currency has significantly cheapened in Georgia. What is the reason of the fall of the dollar rate? Is this a real indicator of the country's economy? Or is it a desire of the state to demonstrate that the country's economic situation is stabilizing or even improving through artificially changing dollar rate?


A week ago, one U.S. dollar in Tbilisi could be exchanged for one lari and 65 tetri. This price has been stably kept for a long time. Today, you can exchange one dollar for 1.62 GEL at best. It would seem that this situation should be profitable for the citizens of Georgia - local currency is gaining momentum. However, Georgians are puzzled by sudden currency and economic well-being and assess this not as a stabilization of the currency, but vice versa. They are tending to think that the new government has something to hide. And it is covering this with an imaginary welfare.

In exchange offices there are less and less people willing to sell dollars, but there are also no people willing to buy foreign currency. To find out the citizens' attitude towards changes in the dollar exchange rate, we went to the exchange office at the Kazbegi Street.

- How do you think, why the foreign currency has cheapened? we ask a middle-aged woman willing to buy dollars.

- Probably, the government wants to show us that the economy is thriving. However, I think it is just the opposite. But for me, that's just profitable, I have debt in dollars. So while it is cheaper, I'll buy more.

- And I think that things are not so bad, a man of middle age interferes into the conversation. We are strange people: it seems we should be happy, but we are complaining. I also buy dollars. My wife is engaged in trade, it's profitable for us to buy the currency. But probably we should have waited: they say it will cheapen.

- For some the change of rate is profitable, and for some - unprofitable, a young girl standing in the back of the line joins the conversation. I get salary in dollars, and I'm very concerned over the fall in exchange. I do not like it at all. But I do not think the price will continue decrease. And I think this is in no way connected to the economy of Georgia. This is a global trend. I have friends in Ukraine. Yesterday they wrote situation there is even worse. I think it is not necessary to exchange the money now, it's better to wait a bit.

- I think this is a complete failure of economic projects in Georgia, says an elderly man. Under Misha situation was stable. And we even cannot learn anything. You see, the new government is inexperienced.

A few people get indignant with him. They call him a traitor. "People like you deserve such president as Saakashvili's," people in the crowd say.

When talking to people in the streets you get an opportunity to learn the level of public confidence in the new government of the country, to understand the general mood of the people. But let us listen to expert opinion. But at first we must emphasize that they advise keep all the money in the currency you use.

In an interview to GeorgiaTimes Sandro Tvalchrelidze told about the real reasons for the fall in the exchange of the U.S. dollar in the country. It turns out it is not related to the domestic economy of Georgia. This is just a consequence of the electoral policy of the U.S. authorities. It is the policy of the weak dollar.

- The U.S. needs to raise the price of oil. As a result of the weak dollar policy they will cut foreign and domestic debt and make their goods attractive. Such a pattern is observed in almost all countries, and Georgia is no exception.

- How long will the decrease last?

- Not for long - as long as oil prices stabilize. I think the dollar will a little cheapen. And then the fall will stop and fluctuate in the range of 20%.

- So, it has nothing to do with the economy of Georgia. And how do you assess the economic situation in the country?

- In this regard, I am pessimistic optimist. I believe that everything is fine but could be better. We need another six months to see the first serious economic achievements of the new government. I'm waiting for the results probably by September. In economics, there are no short-term projects, especially in such a volatile country. The new projects need time to start really working. And there are lots of them; we just need to wait for the dividends.

- During the reign of Mikheil Saakashvili, the country had big problems in small and medium business. In your opinion, what is the situation in this area now?

- Of course, it's much better. Today there's no pressure on businesses. Anyone can do business without fear that you have to give away part of the profits to the treasury of the "National Movement".


Kama Rzayeva


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