"Our reserves are enough to cover the losses of some industries while they adapt to new conditions. The inflation will be the major concern. It is clear that the soum’s free float will prompt price rises for some goods, partly due to outflow of Uzbek goods, as a weaker soum will make Uzbek goods more competitive, " Uzbek Deputy Minister of Economy Shukhrat Ismailov said today at an international press club meeting.
According to him, a higher demand for Uzbek goods will spark deficit of goods in the domestic market, and the government is taking this into account, he added.
"The only question is whether all sectors, the banking system and our main manufacturers are ready for an overnight or gradual liberalization of the foreign exchange system. We thoroughly discussed strategies with the IMF’s mission, on which sectors may suffer and at what point they might need additional financial support. All these issues were analyzed with the Central Bank, the ministries of economy and finance. I repeat once again that we must prepare all our sectors for the float,“ Ismailov underscored.
Another attendee of the meeting, the Deputy Finance Minister Mubin Mirzaev added "We won’t borrow for the soum’s free float".
He added that the recently created Price Stabilization Fund will cushion the negative consequences of inflation during the float. To this end we have injected US$ 100 million. Thus, the state will try to stabilize prices for essential goods.
Mubin Mirzaev noted that Uzbekistan’s gold and foreign exchange reserves are at over US$20 billion. This, he said, will be enough for two years of importing.
