Foreign currency supply outpaces demand in Uzbekistan 

From January to June, commercial banks in Uzbekistan saw a 13% year-on-year reduction in the gap between foreign currency purchases and sales. The Central Bank highlighted that this decline helped reduce volatility in the local foreign exchange market.

A significant increase was observed in the sale of foreign currency by individuals to local banks. In the first half of the year, citizens sold $7.2 billion worth of foreign currency, marking a 31% rise compared to the same period in 2023.

The Central Bank noted that the faster growth in the supply of foreign currency relative to demand played a key role in maintaining market stability.

Despite these fluctuations, the UZS depreciated against the US dollar by just 1.63% during the first six months of the year. In June, the UZS even experienced a slight appreciation, strengthening by approximately 0.5% against the dollar.

Experts believe that the UZS’s temporary appreciation in the first half of 2024 was influenced by several factors, including the issuance of Eurobonds, rising gold prices, and the Central Bank's currency interventions. However, they caution that this appreciation may be short-lived.