Analysis

Giorgi Vashadze, leader of the Strategy Builder political platform in a debate with the Georgian Dream MP, Mamuka Mdinaradze, stated: “Gakharia has more than half a million USD in savings, he does not trust GEL. Since the beginning of this year, the currencies of Armenia and Azerbaijan depreciated by 1% whilst GEL’s depreciation is 12%.”

In the past years, the GEL to USD exchange rate has a tendency of depreciation. GEL started a sharp plunge in November 2014 and the average monthly exchange rate depreciated by 80% whilst the depreciation equals nearly 90% if compared to 2012.

Since the beginning of 2020, the depreciation of GEL vis-à-vis USD constitutes nearly 12% (from 2.85 to 3.22). In the same period, AMD depreciation is 1% although the AMD exchange rate has been fluctuating throughout the year and only recently stabilised. In general, currency exchange rates experience fluctuation from time to time and taking figures from certain periods may not give an accurate description of the general picture. Naming Azerbaijan for comparison in this case is an attempt at outright manipulation and misleading the public since Azerbaijan has a government-determined and kept fixed exchange rate whilst Georgia and Armenia have floating exchange rates. [1] It is unknown what the AZN to USD exchange rate would have been if Azerbaijan had a floating exchange rate.

Graph 1: Percentage Changes in GEL, AMD and AZN throughout 2020 as Compared to the Beginning of the Year (From 1 January 2020 to 20 October 2020)

Source: Investing.com

The property declaration of the Georgian Prime Minister Giorgi Gakharia includes bank accounts managed by himself or his family members. The total amount of savings constitutes nearly USD 556,000. Naturally, FactCheck will refrain from discussing the motivation of the Prime Minister or his trust/distrust toward GEL. However, interpreting the Prime Minister’s decision to have savings in USD as having more trust toward USD as compared to other currencies is a valid conclusion.

1.Information on fixed and floating exchange rates is available on the website of the National Bank: https://www.nbg.gov.ge/index.php?m=521&lng=eng