Investor Presentaiton
GEORGIA
CAPITAL
GEL APPRECIATION DRIVERS
GEORGIAN LARI - TOP PERFORMER IN THE REGION
GEL BEGAN STRENGTHENING IN MID-MAY AND APPRECIATED BY 5.5% COMPARED TO
THE BEGINNING OF THE YEAR AND BY 11.3% COMPARED TO THE YEAR TO DATE LOW
150
140
130
120
110
100
90
Jan-20
Feb-20
-USD/TRY
Mar-20
Apr-20
May-20
Jun-20
Jul-20
Aug-20
Sep-20
USD/BYR
Oct-20
Nov-20
Dec-20
USD/UAH
USD/GEL
USD/RUB
Jan-21
Feb-21
Mar-21
Apr-21
May-21
Jun-21
Jul-21
THE REAL EFFECTIVE EXCHANGE RATE HAS STRENGTHENED SINCE MAY 2021, BUT
REMAINS BELOW THE LONG-TERM TREND
135
125
115
105
95
85
85
REER (Jan 2003=100)
Jun-03
Dec-03
Jun-04
Dec-04
Jun-05
Dec-05
Jun-06
Dec-06
Jun-07
Dec-07
Jun-08
Dec-08
Jun-09
Dec-09
Jun-10
Dec-10
Jun-11
Georgia Capital PLC | Source: NBG.
Dec-11
Linear (REER (Jan 2003 = 100))
Jun-12
Dec-12
Jun-13
Dec-13
Jun-14
Dec-14
Jun-15
Dec-15
Jun-16
Dec-16
Jun-17
Dec-17
Jun-18
Dec-18
Jun-19
Dec-19
Jun-20
Dec-20
Jun-21
Record high remittance inflows, increasing by 41% y-o-y in
1H21;
Solid recovery in merchandise exports, exceeding 2019 levels
by 5.3% in 1H21;
Tourism revenues showing first signs of recovery, increasing
11x y-o-y in June 2021, kickstarting positive expectations;
Tight monetary policy (NBG further increased the policy rate
by 50 bps to 10% in August 2021), supporting stronger GEL
and curbing negative expectations;
Rebounding economic activity and significant interest rate
differential aiding accelerated lending in foreign currency;
New regulation to reduce reserve requirements on funds
attracted in foreign currency, assisting deposit larisation and
higher demand on GEL;
Despite the strong performance of GEL, REER (real effective
exchange rate) remains below its long-term trend, indicating
room for further appreciation potential.
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