20 august 2018

Central Asia news

Day before "free conversion" Uzbek Central Bank devalued national currency

05.09.2017 14:20 msk


In the evening of 4 September, the Central Bank of Uzbekistan announced on its website that they set its exchange rate at 8,100 Uzbek Som for 1 US Dollar starting from 5 September 2017.

Thus, the official state rate of the Som - the national currency - has lost its value almost twice against the US Dollar and equalised or even exceeded the existing "black market" rate of cash currency until yesterday.

The website of the Central Bank of Uzbekistan also reports that they "will set the rate of the Central Bank, as before, every Monday as the average value of the rates fixed at the auctions of the currency exchange in the previous week." Yesterday, the Som to US dollar rate on the Republican Currency Exchange of Uzbekistan was equal to 4,247 Soms for $ 1.

The Central Bank of Uzbekistan said that it will hold interbank trading sessions on buying and selling foreign currency on the Uzbek Republican Currency Exchange on a daily basis, determining the exchange rate by the current ratio of demand and supply to foreign currency and publishing it on the website.

The Central Bank of Uzbekistan has established rates of Uzbek Som to the national currencies of Central Asia countries. So, according to the Uzbek Central Bank, the rate of one Kazakhstan Tenge is 23.9 Uzbek Soms since 5 September. One Tajik Somoni costs 920.45 Uzbek Soms. The Kyrgyz Som is 117.68 Uzbek Soms, and one Manat of Turkmenistan is 2,320.92 Uzbek Soms.

However, the US Dollar exchange rate on the black market in Tashkent on Monday evening equalled the declared Central Bank in two or three hours. This circumstance allows us to assume that the "black market" will remain quite tenacious and will, in turn, directly or indirectly affect the official exchange rate of the national currency.

On 2 September 2017, the President of Uzbekistan Shavkat Mirziyoyev issued a decree partially allowing free conversion of the national currency. From 5 September 2017, legal entities of the Republic of Uzbekistan will be able to purchase foreign currency in commercial banks without restrictions to pay current international transactions (import of goods, works and services, repatriation of profits, repayment of loans, travel expenses and other non-trade transfers).

The residents of Uzbekistan will have the right to freely sell dollars, euros and rubles in exchange offices. However, as it was supposed earlier, they will be able to purchase foreign currency only with the transfer of purchased funds to bank cards. But it's good that you can use bank cards abroad without any restrictions.

Fergana News Agency