Unlike most commodities that are provided by private actors competing with each other, a currency is provided by a monopolist. The only institution that is allowed to produce laris is the National Bank of Georgia (NBG).

In the past two weeks, Georgians have been waking up with a sense of déjà vu. In a matter of days, the Georgian currency lost over 8% of its value against the US dollar and reversed the course of appreciation against the euro. The lari winter blues are reminiscent of the last months of 2013, when, after a long period of stability, the lari lost about 5% of its value against the dollar in the course of ten weeks.

The average cost of cooking one standard Imeretian Khachapuri in October 2014 was 3.35 GEL, which is 0.1% lower both month-on-month (m/m, that is compared to the previous month) and year-on-year (y/y, that is compared to the same month of last year). Foreign currency earners have been affected differentially, depending on whether they are earning their income in USD or EUR.

The average cost of cooking one standard Imeretian Khachapuri in November 2014 was 3.34 GEL, which is 0.2% lower month-on-month (m/m, that is compared to the previous month), and 2.4% lower year-on-year (y/y, that is compared to the same month of last year). However, Khachapuri became even cheaper for foreign currency earners because of a sudden GEL depreciation (m/m and y/y) relative to USD and EUR during the last two weeks of November.

The value of a currency, measured in terms of other currencies, has consequences for the real economy. A more expensive lari, for example, makes it more profitable to import goods into Georgia. The importer has to pay the foreign goods with foreign currency, and when the lari is more valuable, fewer lari is needed to pay for them.