Uzbekistan’s 2020 national currency rate depreciates against US dollar

Finance Materials 15 February 2021 17:05 (UTC +04:00)
Uzbekistan’s 2020 national currency rate depreciates against US dollar

BAKU, Azerbaijan, Feb. 15

By Klavdiya Romakayeva - Trend:

Uzbek national currency in 2020 depreciated by 10.1 percent against the US dollar (from 9,501 soums to 10,461 soums), Trend reports with reference to the Central Bank of Uzbekistan (CBU).

According to the CBU, the soum depreciated by 7.2 percent, while in 2H2020 the exchange rate was relatively stable, dropping by 2.7 percent.

The CBU also noted that last year the currencies of almost all countries that are the main partners of Uzbekistan depreciated, including the Russian ruble which lost 19.3 percent, the Kazakh tenge - by 10 percent, the Turkish lira - by 25 percent. The only exception was the Chinese yuan, which appreciated by 6.2 percent.

It was also stressed that in the last six months of 2020 the exchange rate was relatively stable and was formed under the influence of supply and demand, and the rate of devaluation slowed down to 1.4-1.5 percent per quarter.

“The main surge occurred in April, when the soum on the currency exchange weakened by 5.8 percent as a result of the COVID-19 pandemic effect,” the message says.

According to the baseline scenario, the CBU does not expect sharp exchange rate fluctuations in 2021. The regulator explains this by the stabilization of growth in foreign trade and net exports, as well as remittances.

At the same time, certain risks and uncertainties associated with the coronavirus pandemic and, as a result, the likelihood of tightening restrictive measures still remain.

According to the forecasts of the World Bank and the International Monetary Fund, the rates of economic growth of the countries-foreign trade partners of Uzbekistan will begin to gradually recover in 2021.

The exchange rates of these countries' currencies against the US dollar are expected to remain stable without sharp fluctuations. International remittances are forecast to grow by 8-10 percent by the end of the year.

“These factors will contribute to the fact that the exchange rate of the soum will be formed close to its long-term trend and will not exert significant pressure on inflation,” the CBU said.


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