The devaluation of the soum slowed to a minimum in 3 years due to the growth of exports and remittances.
The devaluation of the exchange rate of the soum has reached a minimum in recent years, Spot reports referring to the CB data.
In 2021, the national currency depreciated by 3.4% – the minimum since 2019. For comparison, in 2020, the soum fell by 10.1%.
The rate of the soum fell most rapidly at the end of the year – before that it was relatively stable. If in the first 10 months the exchange rate grew by only 2%, then an increase of another 1.5% was achieved during November-December.
Among the main trading partners, significant exchange rate fluctuations were observed only in Turkey, where the lira lost almost half of its value. However, inflation accelerated sharply in both Russia and Kazakhstan.
A significant increase in foreign exchange earnings from exports, as well as the volume of remittances, helped to maintain the course. Last year it amounted to 34%, and the supply of foreign currency due to this increased 1.6 times.
According to the latest data, in January-November 2021, migrants transferred $7 billion to Uzbekistan, which is more by 35% than a year earlier. The republic retains the 1st place in the CIS in terms of the volume of transfers from Russia, as well as from Kazakhstan.
It has been repeatedly noted that migrants’ remittances are one of the main channels for the inflow of foreign currency into Uzbekistan. The earnings of migrants partially compensate for the outflow of foreign currency due to the negative balance of foreign trade.
Transfers allow maintaining the soum’s exchange rate, as well as the consumption and purchasing power of Uzbeks. The WB indicated that they helped the population survive the pandemic to a large extent.