AFP, Bishkek :
Uzbekistan said Sunday that it would no longer fix its currency to the dollar, letting the market determine its value in an overhaul of foreign exchange polices that could help the country entice more foreign investment.
In a decree published on the presidential website, the government also said it would now let individuals and companies purchase unlimited amounts of foreign currencies, relaxing strict capital controls.
Under a longstanding and unpopular policy imposed by Islam Karimov, the ex-Soviet country’s first independence-era ruler, Uzbekistan had tied the value of its currency, the sum, to the dollar.
But in recent years the gap between the official exchange rate of 4,210 sums has soared, with the currency worth just over half that rate against the dollar on the flourishing black market.
According to the order, effective September 5, the country will adopt “exclusive use of market mechanisms in determining the exchange rate of the national currency in relation to foreign currency.”
Moreover, citizens and organisations registered in the country may “without limitations, purchase foreign currencies in commercial banks for use in regular international transactions.”
The decree ordered the central bank to maintain the sum’s stability but did not clarify what mechanisms it would put in place.
Uzbekistan said Sunday that it would no longer fix its currency to the dollar, letting the market determine its value in an overhaul of foreign exchange polices that could help the country entice more foreign investment.
In a decree published on the presidential website, the government also said it would now let individuals and companies purchase unlimited amounts of foreign currencies, relaxing strict capital controls.
Under a longstanding and unpopular policy imposed by Islam Karimov, the ex-Soviet country’s first independence-era ruler, Uzbekistan had tied the value of its currency, the sum, to the dollar.
But in recent years the gap between the official exchange rate of 4,210 sums has soared, with the currency worth just over half that rate against the dollar on the flourishing black market.
According to the order, effective September 5, the country will adopt “exclusive use of market mechanisms in determining the exchange rate of the national currency in relation to foreign currency.”
Moreover, citizens and organisations registered in the country may “without limitations, purchase foreign currencies in commercial banks for use in regular international transactions.”
The decree ordered the central bank to maintain the sum’s stability but did not clarify what mechanisms it would put in place.
