On Georgian radio September 10, state leader Eduard Shevardnadze confirmed National Bank president Nodar Djavakhishvili’s September 8 surprise announcement of the imminent introduction of Georgia’s national currency, the lari. According to Djavakhishvili the new currency, printed for Georgia in France, will be introduced before the end of September. Individuals will be able to exchange unlimited amounts of the presently-circulating and highly-inflated coupon at the rate of 1 million coupons for 1 lari. The National Bank has set the lari’s initial rate of exchange at 1.3 for 1 dollar, and hopes to keep it stable with the help of a $52 million loan from the International Monetary Fund. Political and economic chaos in Georgia had long prevented the launching of the national currency. The country’s recent strides toward stability, stemming from the promulgation of a new constitution, the crackdown on opposition paramilitary groups, Shevardnadze’s probable election as president in November, and Russia’s abandonment of support for separatism have created the political preconditions for the lari’s introduction, which should, in turn, contribute to political stability. Tbilisi also expects a marked amelioration of its balance of payments problem through the routing of Azerbaijani oil via Georgia to Turkey and anticipated pipeline-related Turkish investments in Georgia. (12)
Turkish Foray into North Caucasus.