Uzbek central bank weakens currency ahead of reform

By bne IntelliNews August 29, 2017

The Uzbek central bank weakened the official rate of Uzbekistan’s national currency to UZS4,200 to the dollar from UZS4,070 on August 29.

The depreciation is part of the regulator’s preparations ahead of a planned liberalisation of the official rate of the som in September. Further gradual devaluation can be expected ahead of the currency reform.

Earlier, the currency’s black market rate appreciated to UZS7,800 to the dollar from UZS8,300 within five days. The changes are in line with expectations that the official rate and the black market rate will converge at approximately UZS7,000-7,500 against the greenback.

Uzbekistan is preparing to abolish the black market rate of the sum, which has stood in the way of foreign investment and has fuelled high inflation.

Exporters in the country were required to sell a quarter of their foreign currency at the official rate but the rule was recently scrapped. Importers have only been able to buy currency at the unofficial rate.

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