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NEWS

Uzbek Govn’t to carry out wide-scale currency reforms

www.uzdaily.com
29 November 2016

The Government of Uzbekistan is planning to carry our wide-scale currency reforms to develop internal currency market and improve its efficiency, as well as improve conditions for foreign trade economic activities of business entities.

The Single Portal of Interactive State Services published a draft resolution of the President "On priority directions of currency policy". The document envisages measures on liberalization of currency policy.

The document said that main priority directions of liberalization of currency policy are:

Change of methods of regulation of control-limiting approach to protection-simulation by all the state bodies, taking into account ensuring realization of right to manage own assets and create favourable investment climate and business environment;

Stimulate growth of export potential of Uzbekistan, increase competitiveness of local producers in external and internal markets;

Creation of equal conditions for all participants of foreign economic activities at conducting currency operations with banning practice of providing preferences to some enterprises and industries;

Set exchange rate of national currency to foreign currency only based on market mechanisms and to avoid adoption of legislative norms, which negatively impact to stability of national currency;

The draft resolution said that the prices for goods and services, realized and rendered in Uzbekistan, as well as minimal requirement to the charter capital of the companies should be determined only in national currency.

It is expected that the Government of Uzbekistan will ban payment for goods and services in hard currency in the territory of Uzbekistan, excluding payments conducted with use of banking cards. At the same time, the enterprises, receiving payments with help of banking cards, will receive payment in soums.

State duties, fees and other mandatory payments will be levied in national currency, excluding customs duties, levied in the territory of free customs zones and free warehouses of the non-residents of Uzbekistan.

The document said that income, dividends and other income can be paid in hard currency if the company's shareholders adopted corresponding decision and the company has hard currency in its account.

The draft resolution said that individuals can conduct operations in hard currency with use of wire transfer, postal transfer or payment systems.

Individual entrepreneurs without formation of legal entities will be allowed to pay imported goods and services in hard currency via their banking accounts in line with set order, the document said.

The document said that exporters and importers can select forms of payment on foreign trade contracts independently.

People can take hard currency for US$10,000 abroad without any restrictions, except cases, determined by the governmental decisions.

The document said that foreign currency up to US$2,000 will not be declared during departure from or arrival to Uzbekistan.

The Government plans to abolish practice of issuing permissions to take hard currency to foreign countries by the commercial banks and Central Bank.

It is expected that non-residents of Uzbekistan have right to open accounts at the banks of Uzbekistan and freely manage their resources in line with the legislation.

Revenue of the exporters in hard currency will not mandatorily sell part of the currency to the Government. However, the Cabinet of Ministers will determine a list of exported goods and services, revenue from which would be subject to mandatory sell of hard currency revenue.

The draft resolution noted that the Government plans to decrease size of the mandatory realization of part of hard currency from exports stage-by-stage and abolish it at all.

Central Bank of Uzbekistan will be entrusted develop simplified order of sale and purchase of hard currency in internal currency market by business entities.

It said that business entities should be able freely purchase and sell hard currency to conduct payments on currency international transactions.

Central bank of Uzbekistan should develop an order of setting exchange rate of national currency to hard currency, which should be based on current demand and offer of hard currency and mechanism of organization of interbanking trades on purchase and realization of hard currency at currency exchange to determine demand and offer for hard currency.

The document said that based on results of implementation of this resolution, the Government will develop new law "On currency regulation".