How is Georgian Currency Going to Behave Against USD and EUR in 2023?

Georgian Lari (GEL) is a currency of a small country neighboring Russia and Turkey. Before the recent war in Ukraine, Its currency was greatly dependent on money entering the economy from emigrants. The current events of Russia invading Ukraine have had an enormous impact on Lari’s stability since many Russians escaped Putin’s regime and fled to Georgia. Belarusian also escaped from Lukashenko’s terror, and they also chose Georgia to live in. There are other minor tendencies that can slightly affect the GEL as well, so let’s analyze all important factors and predict the GEL position against the Dollar and Euro for 2023.

Georgian Currency Going to Behave Against USD

Russia – Enemy of freedom

Since dawn, Russia was always terrorizing the surrounding neighbors by implementing imperialistic policies and trying to annex every surrounding country. Georgia is in a fight for freedom for centuries against this huge adversary. Russia has not stopped this imperialistic thinking even after the USSR collapsed. Putin called this collapse a geopolitical catastrophe and was trying to terrorize and control its neighbors, including Georgia. Russia almost destroyed Chechnya, killing thousands of innocent civilians in the process.

Russia is using its economic resources in a military manner to control and affect countries’ governments. After the 2008 war between Russia and Georgia, the civilized world started to see the real face of Putin, but still didn’t react properly. Seeing the west was behaving weakly, Russia annexed Crimea in 2014. Now in 2022, on 24 February, Russia started a war against Ukraine in an attempt to eliminate their pro-western democratic government with the main goal of killing president Zelensky.

Russia failed miserably and lost a considerable part of its military personnel and equipment in the process. This caused Putin to implement mandatory conscription in an attempt to halt the war with more human power. To escape the fate of other Russian soldiers who died in the war, many Russians fled to Georgia, bringing their money into the Georgian economy. This caused the demand for Lari to increase greatly and made its positions strengthen against USD and EUR.  After one month of the war, the Lari started to suddenly strengthen against the dollar, solely because Russians started to exchange their dollars for Lari to cover living expenses in Georgia.

As we can see from the chart, the second wave of GEL strengthening against the dollar started in September 2022 when Putin started to conscript men to try and halt Ukraine from regaining its lost territories. The war can affect all asset prices greatly, and this war was able to stop Lari from falling into hyperinflation.

Emigrants – the soul of the Georgian economy

Emigrants sending money to assist their families in Georgia is the main source of economic activity in Georgia for almost 30 years. Despite the emigrants and Russians feeding the Georgian economy with dollars and other currencies, the inflation was 9.8% which shows how weak the economy really is. If Russians did not increase demand for Lari the inflation and currency rates could be much higher.

Tourism and other minor aspects affecting GeorgianLari

Despite being a very small country, tourist sights are abundant in Georgia. The country is a few thousand years old with ancient places and history, making it very attractive for tourists to visit. The second-largest city, Kutaisi, is one of the oldest cities in the world and has many interesting places for tourists, including the Bagrati Cathedral and Gelati Monastery. Despite this, the Georgian economy is less affected by tourist activities.

2023 forecast for Lari: Two scenarios

Below, we will discuss two scenarios that will likely happen in 2023. To check the best source of local information, visit here, where the likely scenarios for GEL are discussed in 2023. So, what are the main scenarios that can happen in 2023?

Scenario 1: Russia loses the war in the first half of the year

If the war ends in the first half of the year, many fled Russian citizens will go back to their country exchanging their Lari reserves in dollars and Rubles, making Lari tank the hit. This will weaken Lari to new heights against the dollar and Euro. Since this won’t affect the emigrants to stop sending the money or make them return to Georgia, the scenario will likely be higher inflation. Europe is facing an energy crisis right now because the main oil provider Russia is under heavy sanctions. This crisis is preventing Lari from weakening further against the Euro. Despite this crisis, the Euro started recovering against Lari, and in the case of the first scenario, this trend will likely continue.

Scenario 2: The second wave of mandatory conscription

Putin declares another conscription to halt the pointless war even further, making more Russians flee the country. Georgia has the most loyal government to Russia, making it the perfect place for Russians to flee. Since we let everyone enter the country without a second thought many more Russians will start exchanging their money for Georgia Lari further strengthening it versus the dollar and Euro.


The main factors that affected the Gel the most in 2022 were increased emigrants and the Russian aggression in Ukraine. Many more emigrants started sending money back to assist their families in Georgia, positively affecting Lari’s rates. Since many Russians fled to Georgia as well, the demand for local currency rose, which further strengthened the Gel against the dollar and Euro. Depending on how fast the current war is resolved in Ukraine, Lari’s fate is going to be affected the most. If Russia decides to withdraw from Ukraine in the first half of the year many Russians will return to Russia, decreasing demand for Lari which is going to make the Lari tank. If war continues and more Russians flee Georgia, Lari is going to strengthen more against the dollar and Euro.

About Author

Georgian Currency Going to Behave Against USD
Marshal NosaCEO
I'm a professional digital marketer with over 7 years of experience in the field. I create well researched content related to finance, cryptocurrency, stocks, forex and metaverse related articles.

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