Uzbekistan sees sharp devaluation of national currency

4 November 2015 16:42 (UTC+04:00)

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By Vusala Abbasova

Uzbekistan saw a sharp devaluation of its national currency, the som, against the US dollar in October, according to the Central Bank of Uzbekistan.

The official rate of the som, as set by the Central Bank, amounted to 2621 som per dollar at the end of September 2015.

This value has fallen to 2692.13 som per dollar, a drop of 2.2 percent, over the month as compared with figures from 2014, when the value fell from 2367.4 som to 2.383 som per dollar. Uzbekistan saw a 0.7 percent decrease in its official som rate.

As of late September 2015, the rate reached 2621 som per dollar.

Further, Uzbekistan’s national currency has devalued from 2422.4 som per dollar in early 2015 to 2692.13 som per dollar as of November 3, 2015, or 10 percent in 10 months.

As of 2014, the official som exchange rate versus the dollar decreased by 10 percent, going from 2202.2 som per dollar on January 1, 2014, to 2422.4 som per dollar on January 1, 2015.

Meanwhile, the Central Bank of Uzbekistan has not commented on the intense October decline in the official exchange rate.

The exchange rate value of the som versus the euro has increased since early 2015 by 0.5 percent, going from 2987.74 som per euro to the current 2973.13 som per euro.

Also, the som exchange rate versus the euro increased by 1.5 percent, from 3031.90 som per euro to 2987.74 som per euro, in 2014.

Additionally, the Uzbek som-Russian ruble official exchange rate has increased by 10.2 percent in the past 10 months.

The som exchange rate versus the ruble increased by 28.5 percent, from 65.14 som-ruble to 46.55 som-ruble.

The central bank sets the exchange rates of foreign currencies versus the Uzbek som for accounting, statistics, and other reporting on currency transactions, as well as for the calculation of customs and other obligatory payments.

Uzbekistan's economy has seen growth with the 8 percent increase in the country's GDP over January-September 2015 due to a 7.3 percent increase in industrial production and a 6.6 percent increase in agricultural production.

Furthermore, the production volume of consumer goods increased by 10.1 percent, retail trade turnover by 15 percent, and services by 12.9 percent.

Despite the unfavorable situation in the world market, measures to boost the country's export potential have allowed the economy to maintain a positive foreign trade balance.

Some 830 companies have been involved in export activity since early 2015. Earlier, they did not export their own products.

The government plans to maintain GDP growth at 8 percent, industrial production at 8.3 percent, and agricultural production at 6 percent. It also plans to increase capital investment by 9.6 percent and to keep inflation within 5.5-6.5 percent in 2015.

Other plans include reducing the tax burden from 20.7 percent to 19.1 percent in 2016, according to the Legislative Chamber of Oliy Majlis of Uzbekistan.

Following the parliamentary committee meeting on budget and economic reforms, it was decided to reduce the tax burden for micro and small enterprises engaged in the service sector from 6 percent to 5 percent in 2016.

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