According to the results of 2024, the real effective exchange rate (REER) of the Uzbek som strengthened by 5.9%, as reported in a presentation by the Central Bank.
On January 23, during a press conference, the Chairman of the Central Bank, Timur Ishmetov, explained that the observed strengthening of the real effective exchange rate at the end of 2024 was of a short-term nature.
Among the reasons for this, he cited the depreciation of the currencies of trading partners and the relatively high level of inflation in Uzbekistan compared to them. Last year, inflation reached 9.8%, which was above the forecast. This year, the Central Bank predicts a slowdown in inflation to 7-8%.
“In the second half of this year, it is expected that as inflation decreases, the real effective exchange rate will return to the level of the medium-term trend,” said the head of the regulator.
In 2024, the Uzbek som depreciated by only 4.71% in relative terms or by 581.78 soms in absolute terms, reaching 12,920.48 soms. The pace of devaluation of the national currency has slowed down by half compared to the previous year, but remains higher than in 2021 and 2022.
From July to September last year, the real effective exchange rate of the som declined, as reported by IMRI. The drop in the real exchange rate leads to a decrease in export prices and an increase in import prices. This allows for an increase in exports, a reduction in imports, and an improvement in the trade balance.
Last December, Spot spoke with analysts about the reasons for the slowdown in the depreciation of the som in 2024, the risks of strengthening the national currency, and the factors that will influence the exchange rate in 2025.
Experts surveyed expect that by the end of the current year, the dollar exchange rate will be in the range of 13,340-14,000 soms. The national currency will be directly influenced by the sale and growth of gold, attracted foreign loans and investments, the policy of the Central Bank, the volume of cross-border transfers, the growth of imports, as well as the state of the global economy.
Earlier, Spot discussed how the official dollar exchange rate in Uzbekistan changed in January.