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Uzbekistan's Ban On Sale Of Foreign Banknotes Signals Upcoming Devaluation Of Uzbek Currency

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by Nargiza Majidova (03/06/2013 issue of the CACI Analyst)

Starting from February 1, 2013, a ban on purchasing cash in foreign currency was introduced in Uzbekistan. From now on foreign currency banknotes can be obtained only through non-cash operations as a prepayment order on the bank account. On February 4, regional mass media reported that Uzbekistan’s government was ordered to reduce the quantity of imported goods, and to substitute these with locally produced ones. These currency regulations of Uzbekistan’s National Bank could signal an upcoming devaluation of Uzbekistan’s currency. An alternative interpretation is that the measure aims to preserve Uzbekistan’s hard currency reserves and to protect the business interest of local entrepreneurs. 

 

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