Foreign Currency Surplus in Uzbekistan
The Central Bank of Uzbekistan has reported that the supply of foreign currency in the country exceeded demand in the first half of 2024, resulting in a more stable domestic foreign exchange market. Commercial banks experienced a 13% decrease in the difference between foreign currency purchases and sales compared to the previous year, which helped to minimize volatility in the market.
One notable trend was the increase in the sale of foreign currency by individuals to local banks. Citizens sold $7.2 billion worth of foreign currency during the first half of the year, representing a 31% surge from the same period in 2023. This growth in the supply of foreign currency relative to demand was highlighted as a key factor in maintaining market stability by the Central Bank.
Despite these fluctuations, the Uzbekistani som (UZS) only depreciated by 1.63% against the US dollar in the first six months of 2024. In fact, in June, the UZS even saw a slight appreciation of approximately 0.5% against the dollar.
Experts attribute the temporary appreciation of the UZS to various factors including the issuance of Eurobonds, rising gold prices, and the Central Bank’s interventions in the currency market. However, they warn that this appreciation may not last long and urge caution moving forward.
Overall, the Central Bank’s financial stability review indicates a positive trend in the supply and demand dynamics of foreign currency in Uzbekistan, leading to a more stable foreign exchange market in the country.
