Do banks in Uzbekistan buy old dollars at a lower rate than the official rate? (video)

A video circulating on social media shows bank tellers buying 1996-issued U.S. dollar bills at a price $5 lower than the official rate. QALAMPIR.UZ reached out to Akmal Nazarov, the press secretary of the Central Bank, for clarification.

According to preliminary information from the Central Bank, the incident shown in the video occurred in the Andijan region. The dollar bill presented by the client to the bank teller was damaged, although this was not visible in the video, which was edited before being shared on social media. Nazarov explained that damaged foreign banknotes are bought at a lower rate than the official rate, in accordance with the law. He further noted that such damaged bills are sent to the United States for processing, which incurs travel and other associated expenses. As a result, banks charge an intermediary fee to cover these transport and commission costs.

Nazarov emphasized that the situation depicted in the video could not occur at legitimate banking institutions. An investigation is currently underway, and more detailed information will be shared once the facts are clarified.

Additionally, Nazarov confirmed that the Central Bank of Uzbekistan is conducting operations involving the sale and purchase of old-style 100 U.S. dollar banknotes (issued before 2009) without issues. He reassured the public that the legal status of these old banknotes as currency remains unchanged.

According to Article 19 of the Law of the Republic of Uzbekistan "On Currency Regulation," the purchase and sale of foreign currency by both residents and non-residents in the country must be carried out exclusively through banks within Uzbekistan. Additionally, the purchase and sale of foreign currency in the interbank foreign exchange market can only be conducted by the banks of Uzbekistan and the Central Bank.

In line with Article 62 of the Law "On Banks and Banking Activities," banks are authorized to independently determine their brokerage fees for currency exchange operations.

Furthermore, banknotes withdrawn from circulation after the issuing bank of the relevant foreign country has made a public announcement, and bearing stamps confirming their invalidity, counterfeiting, or authenticity, are considered unfit for payment. Currency exchange operations involving such banknotes are not permitted. Commercial banks are prohibited from refusing to exchange damaged but still fit banknotes, or from converting them into undamaged notes of the same type. They may also not shred, enlarge, or perform any conversion operations with such banknotes, nor refuse to accept unfit banknotes for collection.

Banknotes with the following types of damage are considered fit for circulation:

- If crushed or soiled to a degree where the banknote's design is still identifiable.
- If tears are glued together, provided the tear does not exceed a quarter of the banknote’s width or height.
- If corners or parts of the banknote (not exceeding 1 cm²) are glued and the torn pieces clearly match the original banknote.
- If small spots, inscriptions, or stamp marks are present (no more than two), and they do not cover more than 50% of any one key feature, ensuring the authenticity of the banknote remains identifiable.
- If there are holes with a diameter no greater than 1 mm, with no more than two such holes.

On the other hand, banknotes are considered unfit for circulation if they exhibit the following signs of damage:

- If they are torn into pieces, even if glued back together.
- If the original color has changed or faded.
- If the banknote is burned or scorched.
- If more than 50% of any key feature is covered by oil, paint, or ink.
- If the banknote has been exposed to chemical agents.
- If the image (such as a photo or portrait) has been altered, the denomination changed, security threads removed, or large-sized inscriptions added.
- If the banknote exhibits significant printing errors, such as missing or incorrectly placed watermarks or security threads, smeared or incomplete images, or missing prints.
- If the geometric dimensions of the banknote have changed by more than 3 mm.