Monday May 25, 11:57 AM
UPDATE 1-Georgia to control lari rate via auctions-cbank
TBILISI, May 25 (Reuters) - Georgia's central bank will stop interventions on the Tbilisi currency exchange, and the lari rate will be determined via currency auctions, the central bank's chief Giorgi Kadagidze said on Monday.
The central bank had been spending its reserves to support the lari.
'This decision does not mean a change in our policy, it just modifies our currency market,' Kadagidze told a news conference. 'It won't have any impact on the lari rate,' he said.
Kadagidze said the central bank would sell and buy dollars at the auctions, which would be held twice a week.
'Currency auctions are more flexible and a modern instrument based on the market mechanism rather than the central bank's participation in the Tbilisi currency exchange trades,' the central bank said in a statement.
The central bank devalued the lari currency in November by 13 percent to 1.65 lari against the dollar and said it would not let the currency fall further.
The bank's currency reserves fell to $1.476 billion by April 1, 2009, $17.2 million less than an year ago.
(Reporting by Margarita Antidze; editing by Stephen Nisbet) Keywords: GEORGIA FX/
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