Exchange rate regime
Georgia has a floating exchange rate regime. Such a regime is characterized by short-term fluctuations of the exchange rate and its' capacity to absorb shoks. However, in the long run the exchange rate is stable. In Georgia the exchange rate is formed on the foreign exchange market that consists of commercial banks, corporations and individuals interested in trading foreign currencies.
Determining the exchange rate
The Georgian lari (GEL) official exchange rate is frequently used for accounting and other official purposes. It is calculated based on transactions on the interbank foreign exchange market and then published by the NBG.
The interbank foreign exchange market is organized with the Bloomberg trading system that enables trading with foreign currencies. All commercial banks and branches of foreign banks licensed in Georgia can participate in this market after receiving participating bank status from the NBG upon their request. Each business day, participating banks publish their FX quotations in the Bloomberg trading system. These quotations are available to all participating banks and their dealers. Securing trades in the system is possible 24 hours a day.
The official exchange rate of the Georgian lari against the U.S. dollar is calculated each business day. The calculation period is determined as the period spanning from 16:30 of the previous business day to 16:30 of the calculation day within the Bloomberg trade platform, taking into account all registered trades. The official exchange rate of GEL against USD is calculated as the average weighted exchange rate of the registered spot trades on the interbank market during the calculation period within the trade platform. Afterwards, the exchange rate is announced by the NBG and effective on the next day.
The official exchange rate of the Georgian lari against other foreign currencies is determined according to the rate on international markets or the issuer country’s domestic interbank currency market (at 15:00) on the basis of cross-currency exchange rates. The sources used for the acquisition of exchange rates are the Reuters and Bloomberg information systems and the corresponding webpages of central banks. The information is received, calculated and disseminated from these systems in an automatic manner.
The official exchange rates are published on the NBG’s website no later than 17:00 on the calculation day (generally at 16:40-16:45).