Uzbek Central Bank explains sharp rise in US dollar exchange rate
Baku, Azerbaijan, August 10
By Fakhri Vakilov -Trend:
The Central Bank of Uzbekistan explained the acceleration of the pace of increase in the rate of foreign currency against the national currency in the domestic foreign exchange market, observed since the second half of July, Trend reports with reference to the Central Bank.
Yesterday, the Central Bank, following commercial banks, updated exchange rates for the second time this week. Since August 10, the US dollar has risen in price by 177 soums and now costs 8,882 soums, while the euro - by 259 soums (costs 9,928 soums).
As noted in the regulator's message, a number of external and internal factors contributed to the formation of this situation.
Since July, in some countries - the main trading partners of Uzbekistan (including Russia, Kazakhstan and China) - there is a tendency to depreciate national currencies, which to some extent, affects the exchange rate expectations and the decision-making process by the currency market participants.
Internal factors are mainly associated with a steady trend of increasing demand for foreign currency on the part of business entities - importers.
“In the conditions of relative stability of demand and supply in the domestic foreign exchange market, the Central Bank’s interventions, the main purpose of which is to sterilize excess liquidity resulting from the purchase of monetary gold from producers, are used as a tool to smooth out short-term exchange rate fluctuations in the domestic foreign exchange market,” read the message.
“Given the current situation in the domestic foreign exchange market, the Central Bank is moving to a wider corridor of daily fluctuations in the exchange rate during currency interventions,” said the Central Bank.
The Central Bank allows a certain small market adjustment of the exchange rate with the possible continuation of short-term volatility and a return to the fundamental trend.
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