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Eurasia
August 4, 2017 www.intellinews.com I Page 21
crease its refinancing rate by as much as 5 per- centage points to 14%. The move appears to be accompanied by cautious gradual adjustment of the sum — the currency has devalued slightly to UZS$4,070 at the official rate since the beginning of July.
“Unifying exchange rates and allowing a market- based allocation of foreign exchange resources would allow the Central Bank of Uzbekistan (CBU) to pivot to a stability-oriented monetary policy ca- pable of effectively controlling inflation,” the IMF noted.
While the currency reforms will undoubtedly im- prove prospects for exporters, especially after the authorities lift the requirement for exporters to
convert a quarter of their earnings into local cur- rency, importers are unlikely to see the full bene- fits of pre-Karimov regulation era trade. In March, Mirziyoyev made it clear the country intends to keep some of its protectionist policies in place, when he announced a plan to reduce Uzbekistan’s imports by $1.1bn in 2017.
Some of these policies will be carried out through import substitution measures such as increas- ing local content in manufacturing facilities that assemble products from foreign imports. But it is not unreasonable to expect Uzbekistan to imple- ment or maintain quotas and tariffs in order to keep Uzbekistan’s own products competitive. In that regard, the post-Soviet country might not be truly opening up just yet.