Dollar holds near 12,000 Uzbek soum mark: market seeks equilibrium
Over the week, the dollar depreciated from 11,975 to 11,960 Uzbek soum but failed to sustainably consolidate above 12,000 soum. The market remains balanced.
In Tashkent, the situation on Uzbekistan's foreign exchange market has barely changed over the week. Following a sharp rise in the second half of October, the dollar has remained below the psychologically important 12,000 soum mark for several weeks.
The current equilibrium is explained by the counter movement of demand and supply. High economic activity and import growth increase businesses' need for foreign currency. At the same time, significant remittances and the population's foreign currency sales support the dollar supply on the domestic market.
After October's correction, the market has become more stable. The soum is additionally supported by tight monetary conditions: a high real interest rate makes savings in the national currency more attractive and limits excessive expansion of domestic demand.
However, opportunities for a rapid strengthening of the soum remain limited. The growing economy requires more imported equipment, raw materials, and consumer goods, so demand for foreign currency persists.
Next week, the 12,000 soum per dollar mark will remain a benchmark for the market. The base range is estimated at 11,850–12,100 soum. A sustained move above the upper limit will require a noticeable increase in demand for foreign currency.
