Uzbek Currency Loses Value As Remittances Drop

February 16, 2009

PRAGUE -- The Uzbek currency, the som, has drastically lost its value against the dollar amid government reports that the global financial crisis is not impacting the Uzbek economy.

The Uzbek Central Bank sells $1 for 1,450 soms, while the exchange rate on the black market has risen to some 1,720 soms to the dollar.

Experts say the local currency is weakening because the foreign currency reserves have been greatly reduced.

People are also running out of foreign currency since labor migrants -- most of them working in Russia and Kazakhstan -- are not sending home as much in remittances as they previously did.

Uzbeks told RFE/RL's Uzbek Service that money machines are out of order because of the currency shortage.

Uzbek economic expert Orif Hoshimov told RFE/RL that the government should start devaluing the national currency or else it will be difficult for the government to control inflation.

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