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Uzbekistan: Is the Economy Going into a Tailspin?

It will soon be more difficult to get a hold of Uzbek hard currency. (Photo: Joanna Lillis)

Uzbekistan has introduced sweeping new banking and import regulations that appear designed to keep hard currency from leaving the country. Observers say residents and entrepreneurs should expect a bumpy ride in the coming months, as the cumbersome new measures are expected to drive up prices for basic goods and encourage an expansion of the shadow economy.

At the beginning of February, new rules regulating foreign currency exchange basically made it impossible for Uzbeks to get their hands, legally, on hard currency. Under the new rules, residents can only trade Uzbek sums for virtual hard currency loaded onto plastic banking cards for use abroad or online, not cash. At the same time, authorities began arresting the currency traders who operate in a thriving black market, where the US dollar fetches approximately 40 percent more than banks offer in exchange for sums.

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Murat Sadykov is the pseudonym for a journalist specializing in Central Asian affairs.

Uzbekistan: Is the Economy Going into a Tailspin?

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