The Dollar “exploded” in Uzbekistan! The Central Bank seeks to justify itself

The exchange rate of the dollar in commercial banks in Uzbekistan has surged past 12,000 soums. The Central Bank has issued an official explanation regarding this situation.

It is noted that the significant devaluation of the national currencies of the main trading partners has led to a strengthening of the real effective exchange rate of the soum through the channels of foreign trade and remittances.

This, in turn, has had a negative impact on the inflow of foreign currency into the country through the channels of export and remittance receipts, as well as on the volume of supply in the domestic currency market.

Consequently, there has been a slight acceleration in the rate of devaluation of the soum's exchange rate in the domestic currency market – a correction under the influence of fundamental factors.

"The Central Bank possesses sufficient instruments to prevent a sharp devaluation of the exchange rate in the future, and, when necessary, fluctuations will be mitigated by implementing additional interventions," the report states.

It is reported that this correction will lead to the real effective exchange rate returning to the long-term trend, and the balanced exchange rate will contribute to increased supply in the market by boosting foreign exchange earnings. The real effective exchange rate is projected to remain relatively stable until the end of the year and in the medium term.