Baku, Azerbaijan, Sept. 10
By Fakhri Vakilov-Trned:
The reason why the President of Uzbekistan Shavkat Mirziyoyev has deprived the right of some individual entrepreneurs (IE) and private farmers to withdraw cash in foreign currency from their bank accounts is to reduce the size of the shadow market, experts of the information and analytical Uzbek portal World of Finance told Trend in an interview.
From now on, IEs and farmers can withdraw cash from their accounts only in the national currency, while foreign currency shall be used solely for the purpose of spending abroad.
“And the reason is clear - to reduce the size of the shadow market by limiting the ability to buy goods and services from shuttle traders. This will help reduce the shadow turnover of business and trade within the country,” experts said.
The experts explained that, according to the law, within the country any settlements should be carried out exclusively in the national currency, which implies that there is no need for cash foreign currencies within the country.
“If private entrepreneurs and farmers want to leave the country and make some purchases there, they can gladly take cash from their account indicating the rationale. Which in our opinion is normal practice even in foreign countries,” the experts stated.
Experts from the World of Finance noted that considering the benefits of entrepreneurs, then representatives of the legal business will definitely win, since they did not engage in the illegal purchase of goods and services and did not hide real income from the budget, without paying taxes.
“Only the black market and representatives of illegal business will lose, because they got used to receive excess profits from the sale of undeclared goods while paying in cash in foreign currency,” they emphasized.
Experts underlined that there is only one unclear point; what documents are required when using cash foreign currency for the purpose of using abroad. “We hope that there will be a minimum of bureaucracy and a maximum of simplification,” they stressed.
Experts added that this will have a positive effect on the country's economy, if entrepreneurs who are used to working illegally, will not completely switch to hiding export earnings from banks.
Moreover, the Central Bank wants to mitigate the situation with acute demand for foreign currency within the country, which may positively affect the appreciation of the soum.
“In general, in our opinion, the Central Bank could have taken such steps even at the beginning of currency reforms in 2017,” the experts noted.
Experts added that excessive cash flow of foreign currency within a country always curbs inflation and is a sign of a weakening national currency.
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