Liberalization Of Forex Policy

On September 2, 2017, the President of Uzbekistan adopted a long-awaited decree on liberalization of the forex policy in Uzbekistan, which provides for high-priority measures for "opening" foreign currency conversion and dealing with possible negative consequences of such liberalization. The Decree expressly proclaims that the state forex policy must only be based on market mechanisms for the determination of foreign currency exchange rates.

The new forex policy comes into force starting from September 5, 2017.

Below we list the most significant changes provided by the Decree, the developments that followed from this Decree and describe the short and mid-term plans of the Government in this sphere.

Purchase of Forex:

Legal entities may freely purchase foreign currency at the market currency exchange rate from commercial banks to make payments under their current international operations (import of goods, works and services, profit repatriation, loan repayment, etc.).

Individuals - residents of Uzbekistan may freely sell and purchase foreign currency without any limitations. Purchased foreign currency will be transferred to these individuals' accounts tied with international payment cards.

Sole entrepreneurs and farmers are free to withdraw their foreign currency proceeds in cash from their servicing banks.

The servicing banks are independent in determining their commission fees for the sale and purchase of foreign currency.

Market Currency Exchange Rate:

The foreign currency exchange rate will be set daily on the inter-banking electronic trades of the Foreign Currency Exchange exclusively on the demand and supply basis. The exchange rate will be published at the website of the Foreign Currency Exchange. The participation of the Central Bank on these trades will be limited. In separate occasions, the Central Bank may sell and purchase the foreign currency to prevent excessive volatility of exchange rates.

The exchange rate set by the Central Bank of Uzbekistan will remain and be set each Monday. This exchange rate will be set as an average exchange rate fixed on the Foreign Currency Exchange for the previous week. The Central Bank exchange rate will be used for statistics and accounting purposes as well as for calculation of customs and other mandatory payments in the territory of Uzbekistan.

As of September 5, 2017, the Central Bank's exchange rate is set at UZS 8,100.00 to USD 1 and UZS 9,645.48 to EUR 1. Moreover, the Central Bank sets...