The National Bank sold an additional 64.9 million US dollars from its foreign exchange reserves, after which GEL strengthened by 1.31 tetris against the dollar and by 1.75 tetris against the euro. As a result of today's trading, the official value of one dollar became 2.7143 GEL, while one euro became 2.9567 GEL.
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The National Bank raised 70 million US dollars for sale at a currency auction, of which 64.9 million dollars were sold.
“The effect of large, one-time transactions continues to influence the foreign exchange market, impacting the GEL's exchange rate. To prevent excessive fluctuations, the National Bank decided to hold a foreign exchange auction today,” explained the National Bank, noting that recent fluctuations in the market are not related to macroeconomic factors and are of a short-term nature.
According to Giorgi Kepuladze, founder of Society and Banks, the National Bank has sold more than 100 million dollars from its reserves in the past two weeks, raising suspicions that this may be linked to the upcoming elections.
"On one hand, the Prime Minister boasts of unprecedented economic growth and a significant improvement in living conditions, yet on the other hand, we see signs of trouble. The National Bank withdrew foreign exchange reserves during the COVID crisis, and now it appears the current management of the National Bank is directly executing the government's agenda,” said Kepuladze.
Following the re-initiation and passing of the Russian Law on so-called Foreign Agents, the National Bank sold a total of 282.1 million US dollars from its reserves. This included sales of 60 million dollars on May 16, 48.7 million dollars on May 28, 60 million dollars on June 11, 48.5 million dollars on October 8, and 64.9 million dollars on October 16.
