The sum exchange rate will remain flexible, and capital movement liberalization will continue, according to the head of the Central Bank of Uzbekistan.
Uzbekistan has developed a roadmap for the gradual liberalization of its capital account, announced Central Bank Governor Timur Ishmetov. Reforms will be implemented gradually, with institutions, safeguards, and risk management strengthened to avoid threatening financial stability.
**Governor of the Central Bank of Uzbekistan: The soum exchange rate will remain flexible, capital account liberalization will continue**
On August 24, Timur Ishmetov, Chairman of the Central Bank of Uzbekistan, announced at the Silk Road Finance & Technology Forum in Tashkent his intention to continue reducing the state's share of the banking sector, which has declined in recent years from 85% to approximately 60%.
According to Ishmetov, to attract investment, the authorities will maintain macroeconomic stability and reduce inflation. "We will continue to reduce inflation to our target of 5% by next year," he emphasized.
The Central Bank Governor also touched on foreign exchange policy, noting that "the exchange rate will remain flexible and market-oriented." He added that the IMF recently reclassified Uzbekistan's exchange rate regime as floating, and the country intends to maintain this approach.
Ishmetov identified further capital account liberalization as another important reform area, which will be implemented gradually and consistently. "Recently, with the support of the IMF, we prepared a roadmap for the sequencing of these reforms. Our goal is to simultaneously provide greater flexibility while strengthening institutions, improving safeguards, and improving risk management so as not to undermine stability," he explained.
Ishmetov also announced a three-year program to transform banking sector regulation, developed based on recommendations from the IMF and the World Bank. The goal of the program is to fully align regulation with international standards, such as Basel III, by the end of the three-year period and ensure the transition of all banks to IFRS.
Reducing the role of the state in the banking sector will remain a key reform focus. "We will continue to increase the share of the private sector in the banking sector," the Central Bank Governor stated.
At the opening of the forum, Ishmetov announced Uzbekistan's plans to attract $1 billion in foreign investment in the fintech sector and train 5,000 specialists by 2030. To achieve these goals, the Central Bank is launching a national fintech strategy, an Innovation Hub, and a venture fund, and is preparing to test a potential digital currency model.