Uzbekistan to fully lift currency controls on September 5

Uzbekistan to fully lift currency controls on September 5

Uzbekistan will allow Uzbek citizens and companies to buy and sell foreign currency at the market rate starting from September 5, the central bank announced on September 4, citing a decree signed by the president, bne IntelliNews reports.

The move would abolish the black market rate of the Uzbek som, which has stood in the way of foreign investment. That will confirm Uzbek President Shavkat Mirziyoyev’s status as a reformist leader dismantling the legacy of the late autocrat Islam Karimov, whom Mirziyoyev succeeded a year ago.

Uzbekistan has already granted permission to a limited number of commercial banks in the country to trade the Uzbek national currency at the market rate as part of a pilot project to usher in the introduction of the floating exchange rate.

The Central Bank of Uzbekistan increased its refinancing rate in June by as much as 5 percentage points to 14%, changing the rate for the first time since January 2015. The central bank’s decision was influenced by “growing inflationary risks” and the need to ensure stable consumer prices, according to a statement from the regulator. The move shows the central bank's willingness to acknowledge the country’s inflationary troubles, which Uzbekistan has been facing for the last couple of years.

The International Monetary Fund described Uzbekistan's reserves as "ample", following a visit to the country this month. They should be sufficient to allow Tashkent to carry out its currency reforms. Uzbekistan's gold and foreign currency reserves stand at about $20bn, covering two years of imports.