Tashkent, Uzbekistan (UzDaily.com) -- The foreign exchange market in 2018 was characterized by an increase in the volume of operations from both the demand and supply side, the growth of participants in foreign exchange transactions, and the continuation of the transition of economic entities and population from the informal to the official foreign exchange market, the Central Bank of Uzbekistan said.

Demand for foreign currency

In 2018, the volume of purchases of foreign currency by legal entities made up US$10.4 billion, having increased by 1.5 times compared to 2017. Along with this, in 2018, the number of economic entities purchasing foreign currency increased 2.3 times from 2,200 units in January to 5,100 units in December.

Foreign currency offer

The main sources of supply of foreign currency in 2018 were export revenues of economic entities and cross-border remittances of the population. The volume of currency sold to banks increased by 2 times - from US$2.1 billion in 2017 to US$4.1 billion in 2018. As a result, the share of export proceeds sold to banks increased from 31% to 61%. In 2018, individuals sold US$2.7 billion to banks, in turn, from these funds, banks sold US$969 million to the population, and directed to cover the demand of legal entities - US$1.7 billion. Net foreign exchange reserves of the republic at the end of the year amounted to US$26.4 billion

Exchange rate policy

The exchange rate policy reflected the ratio of the current level of supply and demand in the foreign exchange market. In particular, during periods of increase in foreign exchange earnings and relatively weak demand, a strengthening of the exchange rate was observed, and, conversely, with a faster increase in demand, there was a weakening of it.

In 2018, the exchange rate change was characterized by seasonal factors that influenced the demand and supply of foreign currency. Thus, by the end of 2018, the exchange rate devalued by 2.7% compared to the beginning of the year (from 8120 to 8339 soums per dollars), then as during the year, its fluctuation between the minimum and maximum value was 7.3% (7781 soums per dollar in August, 8348 soums per dollar in December).