TASHKENT (TCA) — The government in Uzbekistan says it will liberalize the country’s currency regulations, no longer fixing the national currency, the soum, to the U.S. dollar and removing restrictions on the amount of foreign currencies individuals and companies can buy, RFE/RL reports.
The government in a website posting on September 3 said the move would take effect on September 5.
Reuters news agency had reported on August 31 that the currency actions were imminent, citing two unidentified banking sources.
The government decree said that instead of automatically pinning its currency — the soum — to the U.S. dollar, it would allow its value to be determined by market forces.
Islam Karimov, the ex-Soviet republic’s first ruler under independence, had pinned the value of the soum to the dollar.
But the policy has led to a flourishing illegal market as the difference between the official exchange rate of 4,210 soums to the dollar has soared on the black market.
Banking sources told Reuters that the initial rate would be set slightly above the black-market rate, currently about 7,700 soums to the dollar.
The decree said the existing foreign-currency regulations “created an inefficient system of privileges and preferences for individual industries and business entities.”
It said the central bank would still have the responsibility of maintaining the soum’s stability, but it did not specify how that should be accomplished.
In addition, citizens and organizations will be able “without limitations, purchase foreign currencies in commercial banks for use in regular international transactions,” it said.
In August, Uzbekistan had dropped a regulation that required exporters to sell one-fourth of their hard currency revenue to the government.
