The existence of multiple exchange rates for foreign currency in Uzbekistan is stifling economic activity. The case of Sanobar, a former merchant, helps illustrate how government currency policies are putting the squeeze on budding entrepreneurs.
Sanobar, a woman in her mid-30s, was for a brief time a trader in clothing and textiles at Uzbekistan’s largest consumer goods market in Tashkent. Three years ago she left her poorly paid government job and partnered with a group of Turkish traders. But after their first deal, her entrepreneurial career came to an abrupt halt, thanks to Uzbekistan’s artificially controlled currency regime.
Hefty import duties make Turkish goods prohibitively expensive for ordinary Uzbeks, Sanobar discovered. In addition, the inability to purchase foreign currency at official exchange rates made it nearly impossible to convert Uzbek soum profits into the hard currency needed to purchase and import more goods.
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