Labor migrants transferred more than $1 billion to Uzbekistan in April

For four months since the beginning of the year, money transfers from abroad amounted to $2.54 billion, Spot reports with reference to the Central Bank data.

The flow of remittances increased by 27% – for comparison, in the same period of 2021 it was equal to $1.99 billion. In April 2022, migrants sent $1.07 billion to Uzbekistan, which is 88% more than the level of the previous April.

The volume of exchange transactions continues to grow at a faster pace. Foreign currency inflows to banks from citizens of Uzbekistan increased by 53%, reaching $3.27 billion – against last year’s $2.14 billion.

Demand has also risen significantly. If in January-April last year, citizens bought currencies worth $1.36 billion, then over the past four months the figure has grown by 64% and amounted to $2.23 billion.

In April, the population spent $1.16 billion on foreign currency, almost doubling the monthly figure of the previous April. Banks, in turn, sold 1.5 times more foreign currency to individuals – approximately $500 million.

According to the Central Bank, the increase in demand for foreign currency in the first quarter was 69%, although its receipt from cross-border transfers increased only by 3%.

Statistics show that Uzbeks bring more foreign currency to banks than they buy from them. Due to this, financial institutions can partially cover the foreign currency deficit in the corporate environment.

Remittances from abroad remain the main source of currency for the population – in 2021, they amounted to $8.1 billion. Thus, the earnings of labor migrants partly compensate for the outflow of foreign currency due to the negative balance of foreign trade.

Transfers allow maintaining the exchange rate of the soum and the purchasing power of the population. The WB and other observers pointed out that they helped it to survive the pandemic in no small measure.

With the outbreak of hostilities in Ukraine, the ruble devalued sharply. Against the background of foreign exchange restrictions imposed by the government and a projected economic downturn in Russia, remittances are expected to decrease and GDP growth – to slow down.

In early March, Uzbek banks noted the rush demand of the population for cash rubles, dollars and euros – it became one of the reasons for the devaluation of the national currency. However, in April, the demand for foreign currency stabilized, and its supply from citizens increased.