Head of Central Bank: Devaluation of soum to not prevent servicing of external debt

Finance Materials 20 August 2019 17:38 (UTC +04:00)

Baku, Azerbaijan, Aug 20

By Fakhri Vakilov-Trend:

The Central Bank of Uzbekistan does not expect an increase in the risk of credit default of enterprises with foreign currency loans, Chairman of Central Bank Mamarizo Nurmuratov said at a press conference in Tashkent on Aug 20, Trend reports citing IA Gazeta.uz.

Since the beginning of the year, the dollar against the soum has grown by 12.5 percent - from 8336.25 soums on January 1 to 9384 soums set for August 21. Most of the growth occurred in August, when the dollar went up by 679 soums.

The head of the Central Bank does not consider the devaluation of 12 percent “very sharp”, given that the inflation forecast for 2019 is 15.7-16 percent. “In our view, 12 percent is normal in the current situation,” he said.

The Chairman of the Central Bank indicated that the depreciation of the soum will not affect the servicing of the external debt of Uzbekistan.

“The devaluation of the soum of 12 percent will not adversely affect the servicing of external debt. Because external debt is about 20 percent of GDP, this is one of the lowest rates in the world. In international practice, the situation is considered normal with an external debt of up to 60 percent of GDP,” he explained.

As the chairman of the Central Bank noted, the bulk of the external share is intercompany debt.

The total external debt of Uzbekistan as of April 1, 2019, amounted to $19.1 billion; 82.9 percent of all external credit liabilities accounted for a period of more than 10 years ($15.8 billion), another $1.5 billion (7.8 percent) - for a period of 5 to 10 years.

The state external debt amounted to $11.7 billion, or 62 percent of total external debt. Private external debt was fixed at $7.3 billion, including $702.1 million from parent companies.


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