September 11, 11:40UzDaily

Central Bank of Uzbekistan Approves Currency Strategy Until 2030

The regulator announced that the Central Bank of Uzbekistan has approved the strategy for currency operations and interventions in the domestic foreign exchange market for the period from 2026 to 2030. This document was developed in accordance with the laws 'On the Central Bank of the Republic of Uzbekistan' and 'On Currency Regulation.'

The strategy establishes the goals, principles, and approaches of the Central Bank regarding the disclosure of currency operations and interventions. It covers the Central Bank's participation in the domestic foreign exchange market concerning operations and interventions conducted in the national currency—the sum.

Key Concepts

Currency operations are defined as transactions by the Central Bank related to the sale of foreign currency obtained from selling precious metals on international markets, which were purchased from local producers, as well as transactions aimed at serving the Central Bank's clients when buying and selling foreign currency. Precious metals include gold, silver, and other metals bought from local producers.

Currency interventions are actions taken by the Central Bank to ensure the orderly and uninterrupted functioning of the domestic foreign exchange market, smoothing sharp fluctuations in the national currency exchange rate, and maintaining an adequate level of liquid international reserves.

The Central Bank's clients include the Ministry of Economy and Finance, the Reconstruction and Development Fund, organizations under the Central Bank's management, and other institutions. The document separately defines the over-the-counter foreign exchange market as a market where the Central Bank conducts transactions through direct agreements with clients, bypassing the exchange point.

An adequate level of liquid international reserves is defined as the volume of liquid reserves necessary to maintain the country's ability to service external debt, finance imports, and withstand unforeseen external economic shocks.

Factors Considered in Implementing the Strategy

According to the document, the implementation of the strategy will take into account four groups of factors: the Central Bank's goals related to ensuring price stability; its actions within monetary policy; investment policy for managing international reserves; and broader macroeconomic trends, including fiscal conditions and capital movement regulation measures.

Goals and Principles

The Central Bank operates simultaneously in several directions in the domestic foreign exchange market. These include conducting currency operations, maintaining an adequate level of liquid international reserves in line with reserve management policy, ensuring the orderly and continuous functioning of the domestic foreign exchange market, including mitigating the impact of large and/or unexpected supply and demand factors for foreign currency, and reducing sharp exchange rate fluctuations.

In case of contradictions between these goals, the Central Bank's management will determine priorities in each specific situation. Decisions on currency operations and interventions are based on a number of principles. Price stability is ensured under an inflation targeting regime with a floating exchange rate. Currency operations must not aim to change the long-term fundamental trend of the exchange rate corresponding to macroeconomic conditions and inflation target indicators.

The exchange rate itself or its changes are not established as a target indicator of monetary policy. Operations and interventions must not undermine the effective functioning of the inflation targeting regime or the role of the key rate in the monetary policy transmission mechanism. They must also not negatively affect the orderly development of the domestic foreign exchange market or its mechanisms. Furthermore, currency operations and interventions must not lead to systemic accumulation of currency risks and imbalances in the economy.

The frequency of operations related to the sale of foreign currency obtained from the sale of precious metals and client servicing must be determined solely by client needs, the seasonality of international sales of precious metals purchased from local producers, and seasonal demand for foreign currency in the domestic market. At the same time, the frequency and volume of operations and interventions in other cases must gradually adapt to changes in the domestic foreign exchange market and structural features of the economy, including the degree of dollarization, the impact of exchange rate changes on inflation, the state of capital flows, and the stage of financial market development.

As dollarization decreases, capital mobility liberalizes, the influence of the exchange rate on inflation diminishes, and an adequate level of liquid reserves is ensured, the volume and frequency of operations and interventions should gradually decrease.

Conducting Operations and Interventions

The Central Bank carries out currency operations without influencing the direction of the exchange rate, according to a pre-announced schedule and established periodicity. Currency interventions aimed at maintaining an adequate level of liquid international reserves are conducted at a frequency determined by the Central Bank's management. The adequate level of liquid reserves itself is determined by management in accordance with the Central Bank's internal documents on international reserve management.

Interventions designed to smooth sharp fluctuations in the national currency exchange rate are carried out in a way that does not affect the direction of the exchange rate formed based on market principles.

Decision-Making Mechanism

The processes for making decisions regarding currency operations and interventions, as well as accountability mechanisms, are defined in an internal document approved by the Central Bank's management. When making decisions on the goals of currency operations and interventions, the regulator uses qualitative and quantitative analysis. These indicators are set out in the management's internal document and may be reviewed periodically.

Currency operations in the domestic market can be conducted both on the stock exchange and in the over-the-counter foreign exchange market, i.e., directly with clients based on concluded agreements. However, currency interventions are conducted exclusively on the stock exchange.

Communication Policy

Information about currency operations and interventions conducted by the Central Bank, as well as accompanying analytical materials, will be published in accordance with the regulator's communication policy through official statements, press releases, and periodic publications.

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uzdaily.uzSeptember 7, 13:09

Uzbekistan proposes reforming liquefied gas supply system, including support for vulnerable groups

The President of Uzbekistan, Shavkat Mirziyoyev, reviewed proposals for the gradual modernization of the country's liquefied gas supply system. These proposals include creating a new structure for gas procurement and delivery, targeted compensation for socially vulnerable consumers, and increasing the participation of private companies, according to the Presidential Press Service.

Currently, liquefied gas is supplied to approximately 3.8 million consumers and nearly 2,000 social sector facilities. For 2026, the supply of 604,800 tons of liquefied gas is planned for households and social institutions.

The existing supply mechanism, covering resource distribution, pricing, and subsidies, was analyzed within the framework of the presentation. It was noted that in some areas, gas delivery occurs later than scheduled, forcing consumers to purchase additional volumes at market prices from gas stations.

According to the analysis, 22% of consumers receive liquefied gas with an interval exceeding 46 days. Due to such delays, some families effectively spend significantly more on gas than the established subsidized price.

Although households and social institutions currently receive gas at preferential rates, the gap between production, import, procurement, and delivery costs is widening, increasing the need for budgetary subsidies.

Support for Vulnerable Populations

The proposed reform involves establishing LPG-Trade LLC with Hududgaztaminot as a founder. This new structure will purchase liquefied gas through the exchange and organize its delivery to households according to approved procedures. The retail price will be determined using economically justified mechanisms.

It is planned that socially vulnerable groups will receive compensation for every kilogram of purchased liquefied gas. The reform should gradually shift state support from a general subsidy system to targeted assistance for individual consumers. This mechanism is expected to increase the efficiency of public spending and provide more focused support to needy families.

For social sector facilities, liquefied gas will be purchased at exchange prices, and the negative difference arising from selling gas to households at a regulated price will be covered by the state budget.

Another part of the proposals aims to expand the involvement of private business. A pilot project is planned with the involvement of private liquefied gas delivery operators in the Andijan region. Operators must possess the necessary licenses and permits and hire qualified specialists.

At least two operators are expected to participate in the pilot project, along with the introduction of a mobile application and online services for customers. Given the number of consumers and the distance between facilities, the construction of additional facilities in accordance with urban planning standards and fire safety requirements is envisaged. The possibility of extending this approach to other regions will be considered based on the results of the pilot project.

Mirziyoyev emphasized that the reform must be based on accurate calculations, taking into account convenience for the population and the principles of social justice. Responsible agencies have been instructed to ensure timely gas delivery according to schedule, digitize calculations, make distribution more transparent, and prevent artificial shortages and unjustified price increases. They were also tasked with guaranteeing the timely payment of compensation to socially vulnerable groups, adhering to safety requirements at gas stations and during transportation, and strengthening control over private operators.

The reform is expected to reduce liquefied gas delivery times, improve consumer service quality, and ensure more efficient use of budget funds. The presentation also included information on the implementation of additional directives from September 2nd regarding the construction of external infrastructure and a satellite city for the integrated nuclear power plant being built in the Jizzakh region.

uzdaily.uzAugust 29, 10:00

IMRI developed a new method for forecasting Uzbekistan's regional economic growth until 2030

The Institute of Macroeconomic and Regional Studies (IMRI), in collaboration with analytical centers, is developing a unified methodological approach to assess and forecast the economic growth of Uzbekistan's regions until 2030, IMRI reported.

The proposed methodology involves evaluating three different development scenarios: inertial, target, and passive. Potential growth factors and economic risks are taken into account.

The goal of this approach is to enhance the significance of economic forecasting in the process of decision-making. It allows for the identification of factors necessary to achieve target indicators, as well as the required volumes of resources and potential risks that may affect growth rates.

Approaches to Forecasting

Within this system, the inertial scenario models the dynamics of the regional economy based on the continuation of current trends. The target scenario assesses the volume of additional investments, production capacities, and structural transformations required to achieve established benchmarks. The passive scenario analyzes possible losses in economic growth if internal or external market risks materialize.

During a seminar organized by IMRI, analysts conducted practical calculations using the proposed methodology and discussed options for refining the structure considering the specifics of individual regions.

The ultimate objective of this initiative is to create a unified analytical system capable of identifying specific drivers of economic growth for each region, directing investments and resources to priority sectors, and assessing the effectiveness of implemented economic policies.