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Georgian currency hits record low

Xinhua, February 20, 2015 Adjust font size:

Despite central bank intervention, the Georgian national currency lari (GEL) fell to 2.1472 to the U.S. dollar on Friday, its lowest level since January, 2004.

The National Bank of Georgia (NBG) said it sold 40 million dollars at a foreign currency auction Thursday, its second intervention this year after selling the same amount of dollars and raising the key rate by 50 basis points to 4.5 percent on Feb. 11. The measures had helped to halt the GEL slide, but only briefly.

Since it began to depreciate early November last year, the GEL has lost 22.4 percent of value against the U.S. dollar and 10.9 percent against the euro.

Meanwhile, Georgia's exports continued to decline in January, down 30 percent year-on-year, according to data released by NBG. The government attributed the situation mainly to the decline of exports to Russia and Ukraine in the early period of the year.

Data showed that remittances decreased to 75.5 million dollars in January, down 23.3 percent compared with the same period last year, due to falling transfers from Russia.

In the face of the sluggish economy, some economists has been calling on the government to scrap excise tax on fuel to stimulate growth in a longer term. Endi