Uzbekistan has allowed a limited number of banks and companies to trade foreign currency at the market rate, two sources told Reuters, in a pilot project that could lead to the introduction of full convertibility of the national sum currency. The former Soviet republic's elaborate system of currency controls and restrictions is the main obstacle to foreign investment and a liberalisation would be President Shavkat Mirziyoyev's most important economic reform to date.
Uzbekistan, Central Asia's most populous nation and second-biggest economy, requires exporters to sell a quarter of their foreign currency revenue at the official rate, about 4,000 sums per dollar.
Importers, at the same time, can only buy foreign currency on a separate, so-called bourse market where they pay about 9,000 per dollar, although the rate is not officially reported. The third, black market rate, mostly used by individuals, values the sum at about 8,400.
Under this system, a hypothetical company which exports goods worth $1 million would get 7.75 billion sums after the mandatory partial sale to the central bank. If it wanted to exchange the same amount back into dollars, the company would only get about $860,000. According to two sources close to the banking sector who have seen the relevant documents, new regulations allow some banks to sell foreign currency to a limited number of importers at whatever rate they agree on.
The move is meant to test the new system before its universal introduction, said one of the sources. The central bank could not be reached for comment and did not reply to emailed questions. If the reform is indeed implemented, it would be the biggest change yet introduced by President Shavkat Mirziyoyev. Last year he succeeded veteran leader Islam Karimov, who died in September after running the nation of 31 million for 27 years. The liberalisation would mean the government, which has used currency restrictions to limit imports, could face new challenges in supporting domestic industry.