Uzbekistan to lift most forex restrictions from Sept 5

FILE PHOTO - Uzbek President Shavkat Mirziyoyev speaks during a news conference following his talks with Russian President Vladimir Putin (not pictured) in Moscow's Kremlin, Russia April 5, 2017. REUTERS/Pavel Golovkin/Pool

TASHKENT: Uzbekistan will allow its citizens and companies to buy and sell foreign currency without restrictions at a market rate, taking a major step towards opening up its economy to badly needed foreign investment.

The reform, which confirms a Reuters report published last week, takes effect on Tuesday, according to a decree published on President Shavkat Mirziyoyev’s website on Sunday.

Since being elected in December, Mirziyoyev has moved to gradually liberalise the country’s sum currency, allowing some companies and banks to trade it at a market rate and scrapping mandatory foreign currency sales last month.

The decree removes most restrictions on foreign currency operations by individuals and businesses in central Asia’s second largest economy. However, when buying foreign currency, Uzbek citizens will have it transferred onto special bank cards rather than being handed cash.

The document also instructs the central bank to run a tight monetary policy to ensure the sum’s stability. It states that the sum’s exchange rate must only be determined by market factors, but provides no figures.

Foreign companies have largely stayed out of the resource-rich nation of 32 million because decades-old regulations forcing most businesses to sell foreign currency at a knockdown official rate while buying it at a much more costly one.

As of Sunday, the official rate of the sum - set by the central bank - stood at 4,210 per dollar while the black market rate was around 7,700 per dollar. - Reuters