Uzbek currency to float freely

RUSSIA / FSU POLITICS - In Brief 26 Aug 2019 by Alex Teddy
On August 20 it was announced that the Uzbek currency (the UZS (pronounced 'Som')) will float freely. Up until now the Uzbek Government had a cap on the currency's daily fluctuations and the government limited a citizen's right to buy other currencies. This is part of the government's liberalization of the economy in a bid to draw foreign investors to the Central Asian nation.Until now the official rate for the USD was half the black market rate. This was a major obstacle to investment. Fluctuations of Uzbek currency were limited to 5% of value per day up or down. This was to avoid the catastrophic hyperinflation which plagued the country in the early 1990s. When the announcement on ending currency fluctuation limits took effect the UZS fell by 3.% in just over a day. It has since stabilized. President Shavkat Mirziyoyev knows his country can no longer rely so heavily on hydrocarbons. In this nation of 33 million people the oil and gas wealth goes overwhelmingly to a minute elite. The country receives USD 4 billion in remittances per annum from Uzbek guest workers in Russia. Therefore the country is very vulnerable to changes in the value of the RUB.

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