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Demand for foreign currency from individuals in Uzbekistan rises in 2020

Finance Materials 15 January 2021 14:29
Demand for foreign currency from individuals in Uzbekistan rises in 2020

BAKU, Azerbaijan, Jan. 15

By Klavdiya Romakayeva - Trend:

Last year, legal entities and individuals in Uzbekistan bought $19.5 billion on the foreign exchange market, which is 25 percent more compared to the previous year ($15.5 billion), Trend reports referring to the press service of the Central Bank of Uzbekistan (CBU).

According to the CBU, this increase was mainly (by 58 percent) provided by the growth in demand for foreign currency from individuals. It is noted that the amount of foreign currency bought by individuals accounted for only 4.12 billion, which is 2.3 times more than a year earlier.

At the same time, legal entities purchased $3.65 billion in banks, which is 14 percent higher than last year. The currency exchange carried out transactions for $11.7 billion, increasing by 11.2 percent.

The CBU reports that legal entities bought foreign currency mainly (60 percent) to pay for imports of production equipment, goods, and raw materials. Also, at the expense of these funds, they paid for foreign consumer goods and medicines (21 percent), repaid foreign loans (15 percent), and performed other operations.

It was noted that legal entities and individuals as a whole sold foreign currency without taking into account the interventions of the CBU for $14.3 billion, and bought for $19.5 billion. Thus, demand exceeded supply by $5.2 billion. CBU's interventions formed at the same level.

Also, individuals in 2020 sold foreign currency through exchange offices for $4.6 billion, which is 21 percent more than last year. It is noted that Uzbekistan received $6 billion through remittances which are comparable to last year's level.

Furthermore, according to the CBU, the national currency depreciated against the US dollar in 2020 by 10.1 percent, from 9,501 soums to 10,461 soums ($0.91-$1).

Earlier it was reported that in the 1H2020, the national currency of Uzbekistan depreciated by 7.2 percent due to changes in external and internal economic conditions caused by the COVID-19 pandemic, growth in devaluation expectations as a result of a sharp devaluation of the currencies of major trading partners, as well as an increase in demand for foreign currency in the domestic foreign exchange market.

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Follow the author on Twitter: @romakayeva

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