ABSTRACT
The chapter describes the process of the politicization of dollarization by analysing the currency crisis of 2015. It provides a broad political and economic context of the Georgian state after the change of government in 2012. The currency crisis of 2015 is studied in connection with previous developments in the financial sector to give a historical perspective. In fact, the currency crisis was not a breaking point in the politicization of dollarization, but rather a triggering cause. At the heart of the issue lay the over-indebtedness and poverty of households, which had accumulated over years (since the 2005 credit boom) and was uncovered by the lari crisis. The chapter explains why and how the currency crisis turned into a triggering cause for the politicization of dollarization and how the government responded to the issue. Accordingly, the main de-dollarization policies (2017–2019) of the Georgian government and the central bank are reviewed, and their plausibility is assessed. Thus, the chapter answers the following questions: what factors led to the problematization of dollarization, or what does it take for the government to start de-dollarization? To what extent are the recent de-dollarization policies plausible in the Georgian context?
