Uzbekistan Diagnostic Assessing Progress and Challenges in

The President’s September decree postulates current account convertibility
. Legal 
entities and (since October 2017) individuals, can purchase foreign currency for current 
account operations (import of goods, works or services, profit repatriation, payment of travel 
expenses and other current account payments) in commercial banks without restrictions. The 
mandatory surrendering of a certain share of foreign exchange proceeds has been abolished 

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OFFICIAL USE
9 
OFFICIAL USE
for all exporters. Banks no longer need a separate license for conducting foreign exchange 
operations.
Further clarifications are needed to facilitate foreign investment and allow the efficient 
functioning of capital markets. 
For some financial account transactions, such as buying and 
selling of shares, or transfers between residents and non-residents of means other than those 
earned from current account operations, agents still face some obstacles converting sums into 
foreign currency. Free entry and exit of capital is a crucial precondition for attracting foreign 
investment and efficient capital markets. While retaining control over potentially damaging 
large capital flows, the authorities should come up with clarifications and procedures to 
remove unwarranted obstacles. The Presidential decree directs the central bank to draft a new 
law on foreign exchange regulation during 2018. 
The majority of businesses will strongly profit from the currency liberalisation
. The free 
access to foreign exchange will allow them to resort to more sophisticated imports needed for 
the development of the respective industry and find the proper place in international value 
chains according to their comparative advantages. The free float will allow the exchange rate 
to be in line with fundamentals. This will especially benefit exporters that previously suffered 
from being forced to exchange at least part of their foreign currency revenues at the 
overvalued official exchange rate. Foreign-owned companies will be able to repatriate their 
profits instead of being forced to re-invest or deposit their earnings with local banks 
independently of efficiency because they can’t convert local currency into international 
exchange.