TASHKENT, SEPT. 5 2017 (The Conway Bulletin) — Uzbekistan released its soum currency from decade-long controls that have artificially bolstered its strength and allowed a Black Market to flourish.
Officially, the soum dropped by nearly 50% to trade at around 8,000/$1, roughly the Black Market level prior to the announcement that currency controls were to be lifted.
President Shavkat Mirziyoyev, in power since September last year, wants to increase civil liberties and he saw the dual currency rates as holding back investment. The currency controls effectively made investing in Uzbekistan twice as expensive for foreign companies as it should have been.
A Conway Bulletin correspondent in Tashkent said that hundreds of ordinary Uzbeks queued to exchange Uzbek soum into US dollars at banks and official exchange points rather than through Black Market dealers in the city’s bazaars.
While most people were happy that the currency controls had been lifted, others were more cautious. One of the main gripes was that the government would only allow the exchanges to go through on special bank cards, rather than through cash.
“Currency can only be bought on a conversion card, not cash? I mean you sell your dollars to the bank in cash, but you can buy it only on the card?” one man queuing at a bank said.
“The question is – what’s the use of it? After all, with the same success, I can buy currency on the Black Market and go abroad and spend it there with the same success. When will they start selling foreign currency in cash?”
Others were more upbeat.
“It is clear that the first stage of the reform will begin to work now. And I hope after some time we will be allowed to buy dollars in cash,” another man said.
Nearby, though, the impact of scrapping the currency controls was being felt in other ways. In an area of Tashkent’s biggest bazaar usually crowded with money changers, only policemen stood idly. The currency Black Market, so long a feature of Uzbek life, has been, at least temporarily, put out of business. Some people, though, ruefully said that it could rebound.
“The Black Market will eventually come back if cash cannot be bought in banks,” one woman said.
ENDS
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(News report from Issue No. 342, published on Sept. 7 2017