The Central Bank of Uzbekistan notes currency devaluation in trading partners boosting russian ruble's real effective exchange rate through trade and remittances.
Consequently, this has had a negative impact on currency inflows into Uzbekistan through export and transfer channels, as well as on the volume of supply in the domestic foreign exchange market.
As a result, the domestic foreign exchange market witnessed an acceleration in the pace of devaluation of the Sum currency, a correction driven by fundamental factors.
The central bank possesses sufficient tools to prevent abrupt devaluation of the exchange rate in the future, with the capability to mitigate fluctuations through additional interventions if necessary.
This correction will lead to the real effective exchange rate returning to its long-term trend, and a balanced rate will contribute to market supply growth by increasing currency inflows. The real effective exchange rate is expected to remain relatively stable until the end of 2023 and in the medium term.
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