Overview
The Georgian Lari is the official currency of Georgia. It is issued and managed by the National Bank of Georgia. The Lari floats on foreign exchange markets and serves as the currency for the Caucasus bridge nation positioned between Europe and Asia. Georgia has experienced ongoing currency stability challenges linked to regional geopolitical tensions (conflicts with Russia).
Etymology & History
The word "Lari" is derived from Georgian monetary tradition; "tetri" means "white" in Georgian. The modern Georgian Lari was introduced in 1995 following Georgia's independence from the Soviet Union (1991), replacing the Soviet Ruble. The Lari replaced the temporary Georgian Kupon (1992–1995) during the post-Soviet transition.
Georgia's monetary history includes Russian imperial rubles, Soviet rubles, the transitional Kupon (1992–1995), and the modern Georgian Lari (1995–present).
Timeline of Key Events
| Year | Event |
|---|---|
| 1991 | Georgia declares independence from Soviet Union |
| 1992–1995 | Georgian Kupon (transitional currency) |
| 1995 | Georgian Lari introduced; replaces Kupon |
| 2008 | Russia-Georgia war (Ossetia); currency depreciates |
| 2010–2015 | Gradual stabilization; infrastructure investment |
| 2020–present | Lari depreciation; external debt growth; pandemic pressures |
Current Denominations
Coins in circulation: 1, 2, 5, 10, 20, 50 Tetri; 1 Lari (limited circulation)
Banknotes in circulation: 1, 2, 5, 10, 20, 50, 100, 200 Lari
Withdrawn: Pre-2008 notes gradually phased out
Exchange Rate Regime
Free float. National Bank intervenes to manage volatility, particularly during political/military crises.
Convertibility
- Current account: Fully convertible
- Capital account: Partially convertible; restrictions on foreign investment outflows
Monetary Policy Framework
National Bank targets inflation (4±2%) using policy rate adjustments. Independent central bank with moderate credibility. Monetary policy sometimes pressured by fiscal deficits and external shocks.
Notable Characteristics
- Caucasus bridge: Geopolitical position between Europe and Asia; key transit route
- Russia tensions: 2008 war with Russia over South Ossetia; ongoing occupation; currency risk
- Wine tradition: Georgian wine exports ancient history; tourism growing
- Silk Road legacy: Historic trade hub; renewed Belt and Road trade corridor importance
- Tourism growing: Georgia increasingly attracting regional tourism; currency demand growing
- Remittance-important: Diaspora remittances significant income source
- Infrastructure investment: World Bank and Asian Development Bank projects
- Geopolitical flashpoint: NATO integration aspirations; Russian opposition; currency risk factor