Azernews.Az

By Mushvig Mehdiyev

The National Bank of Georgia denied its inappropriate actions amid the start of financial challenges in the country, turning down former Prime Minister Bidzina Ivanishvili's claims as slanderous.

Giorgi Kadagidze, the National Bank's chairman, said the bank did everything right in order to avoid the currency crisis, calling on the government to immediately stop its slanderous campaign.

Billionaire tycoon Ivanishvili claimed the NB could relinquish more of its reserves in order to save the national currency, the Lari, and prevent its further depreciation against the U.S. dollar.

In response, Kadagidze said he would not spend money from the reserves to strengthen the lari as its devaluation came after fundamental economic problems in Georgia.

"I do not want the people to think that spending money from the reserves is the way out from this problem. Georgia’s currency reserves is our asset. It is the main guarantee of the country's financial stability," Kadagidze noted.

"As long as I am the president of the NB and my team runs the bank, the country will not face financial instability,” he added.

Kadagidze stated that Georgia's policy to accumulate and manage the reserves is recognized by all international organizations, including the International Monetary Fund. Replacing exports, tourism and transfers by the reserves is a wrong economic decision promising no results, believes the top financier.

"Unfortunately the lari has depreciated by 30 percent and it affected imports, as well," he said recalling some of the warnings he issued against government policies, which it is important to note officials dismissed at the time.

"To avoid currency devaluation and to balance the situation, we injected several million dollars in the economy and spent $120 million from the currency reserve in February,” he noted.

The National Bank's reserves stood at $2.61 billion as of the end of January, official data states.

Georgia's national currency, the lari, started to fall in value against the dollar last November. A drop in oil prices and Russia' economic comedown following west-imposed sanction have contributed to such a devaluation.

Kadagidze said the NB would keep on cooperating with the government, regardless of its accusatory tone.

Late on February 27 the Georgian lari strengthened by 3.7 percent against the dollar. It traded at 2.1654 per one dollar.