Bloomberg: due to the relocation of Russians, the currencies of Georgia, Armenia and Tajikistan became the best in world rankings

The emigration of Russians against the background of the armed conflict in Ukraine brought the currencies of the former Soviet republics to the first place in the world rankings this year. This is reported Bloomberg.

The national currencies of Georgia and Armenia, as well as Tajikistan showed the greatest growth against the dollar. Tens of thousands of Russian citizens have settled there since February, the agency writes, bringing with them savings equivalent to billions of dollars.

This has led the Armenian dram to rise by more than 22% against the dollar since the beginning of the year, becoming the world’s leading currency, according to Bloomberg. The Georgian lari and Tajik somoni appreciated by more than 16% and 10%, respectively, outpacing the Russian ruble.

According to the National Bank of Georgia, the emigration of Russians provoked a five-fold increase in remittances coming to Georgia from Russia this year, which is more than 60% of all transfers and exceeds $1.75 billion. Remittances to Armenia in the first ten months of this year amounted to $2 .8 billion, almost four times more than in the same period in 2021. In October, they reached their highest level since at least 2004, the Central Bank of Armenia reported.

Bloomberg notes that the greatest impact on the growth of the local currency was provided in small republics. Kazakhstan, which has a population of about 19 million, about six times the size of Armenia and Georgia, has also become a popular destination for Russians. However, the tenge, as forecast by the agency, may end the year with losses.

Countries bordering Russia were expected to suffer as their biggest trading partner came under sanctions. Contrary to expectations, huge capital inflows boosted their foreign exchange reserves and improved their current account balances. Armenia’s economy grew at double digits in the second and third quarters of 2022, while Georgia’s economy posted nearly 10 percent growth in the three months to September.

In Tajikistan, remittances rose by at least 50% in the first half of the year, allowing the landlocked country’s economy to grow by 7% this year, compared to earlier forecasts of 4-5%.

The International Monetary Fund raised its economic growth forecast for Georgia for the whole year to 10%. The Central Bank of Armenia raised its GDP growth forecast from 4.9% to 13%.

Daria Erozbek