Uzbekistan plans to gradually reduce its economy’s dependence on foreign currency

“More than three years have passed since we announced the liberalization of the currency market. During this period, the country has accumulated sufficient experience in the area of free currency conversion. We now need to gradually reduce the dependence of our economy on foreign currencies. Therefore, in the following year, the share of foreign currency loans has to be reduced from the current 50 to 45 percent, that is, by at least $2 billion,” the President said in his address to the parliament.

Mirziyoyev also stressed the importance of ensuring at least 5 percent growth of the economy in 2021 and keeping the budget deficit less than 5.4 percent of gross domestic product. The government will take the necessary steps to ensure that the figure does not exceed 2 percent in the next two years.

“The share of international bonds issued in national currency should be increased from the current 25 percent to at least 40 percent in the coming year. At the same time, the interbank currency market will be transferred to an online platform, allowing entrepreneurs to buy currency directly from the bank. As a result, the acquisition of currency will take only half an hour,” the President added.

He also noted that projects implemented in the regions through external borrowing will be discussed by local councils and the public. A system of public control on the results of such projects will be created.

Government-guaranteed external borrowing will also be reduced, and more private capital will be attracted to investment and infrastructure projects. For example, more than 40 large and medium-sized projects are to be launched next year through public-private partnerships.

In order to strengthen competition in the financial market, the Central Bank is requested to submit a draft proposal on non-bank credit organizations for consideration before February 1.

“It is time to establish a legal framework for the introduction of Islamic financial mechanisms in our country.  Experts of the Islamic Development Bank and other international financial institutions will be engaged in this process,” Mirziyoyev added.