September 14, 2017 / 9:14 AM / a year ago

Uzbekistan will allow cash FX sales within months, central bank says

TASHKENT, Sept 14 (Reuters) - Uzbekistan will let local banks sell foreign cash to individuals in a few months, another step in its liberalisation of foreign exchange operations, the former Soviet republic’s central bank said on Thursday.

The Central Asian nation this month lifted most of the restrictions on foreign exchange - which had existed for decades - by allowing its citizens to buy and sell foreign currency at banks using a market rate.

But Uzbeks buying dollars or any other currency can only get it deposited into special bank cards, with no cash sales. That has prompted some people to continue using the black market, where cash is readily available.

“Of course, we will sell cash.” Timur Ishmetov, first deputy chairman of the central bank, told reporters on Thursday. “But at the moment I can’t tell you the exact date. It could be in a month or six months if things go as we planned. What I can tell you is our plans are going smoothly so far.”

Ilhom Norqulov, the director of monetary policy department at the central bank, told the same briefing the regulator expected no significant impact on inflation from the foreign exchange reform.

The central bank devalued the Uzbek sum’s official rate to 8,100 per dollar from 4,210 per dollar this month.

But the official rate had only applied to mandatory sales of foreign currency by exporters, which have now been scrapped, and had no impact on the price of imported consumer goods.

Norqulov said annual inflation stood at 11.2 percent in August and the bank expected it to remain around 11 to 12 percent at the end of this year and slow to single digits in 2018. (Reporting by Mukhammadsharif Mamatkulov; Writing by Olzhas Auyezov; Editing by Larry King)

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