If the public sentiment towards the lari changes, there will be nothing left of forex reserves - Nikoloz Shurgaia
By the 2024 parliamentary elections, the central bank's forex reserves had decreased by approximately $630 million, by $1 billion in a year.
According to financier Nikoloz Shurgaia, over the past five years, the reserves have increased by only 15% that is not sufficient.
"5 years ago, in October 2019, Georgia's international reserves stood at GEL 3.2 billion, now at GEL 3.6-3.8 billion. At the same time, the money supply (M2 parameter) soared from GEL11 billion to 27 billion that is a significant increase. The reserves are not almost increased by only 15%. The larization stood at 50%, historically it was at 65%-70%; that is, historically, our society has a strong and serious attitude towards the lari. If this mood changes, the reserves will not withstand this conversion, there will be nothing left of forex reserves.
I have seen several devaluations, the heads of the central bank of an authoritarian country insist until the last minute that everything is fine, for example, in 2010 in Belarus. "Before this fall began, the Belarusian ruble was set at 3 000 against the dollar, and in one day, it stood at 9 000," Nikoloz Shurgaia notes.
Note: Devaluation is a deliberate reduction in the value of a national currency, relative to another currency through the intervention of its government. When the amount of money in circulation was linked to gold, devaluation meant a depreciation of money in relation to gold (more money was needed to buy 1 gram of gold). Today, devaluation is an increase in the rate of any international currency mainly carried out by central or national banks. For example, if 1 dollar cost GEL 2.6, and through the government’s artificial intervention stood at 2.8, this the currency devaluation.
