Tashkent, Uzbekistan (UzDaily.com) -- In January-April 2020, the situation in the domestic foreign exchange market was formed in the face of increasing demand and supply of foreign currency in all its segments.

The total volume of operations in the domestic foreign exchange market amounted to US$5.4 billion, an increase of 1.8 and 1.3 times compared with the corresponding periods of 2018 and 2019, respectively.

The demand for foreign currency from legal entities in the first 4 months of 2020 increased 1.1 times compared to the same period of last year and made up US$4.2 billion (in January-April 2019 – US$3.9 billion).

During this period, business entities in the OTC foreign exchange market purchased US$1.06 billion (in January-April 2019 - US$939 million), while the volume of transactions on the currency exchange reached US$3.1 billion (for the first 4 months of 2019 - US$2.8 billion).

In the target structure of the purchase of foreign currency, the main share (63%) is paid for the import of equipment, goods and raw materials for industrial use, 22% - the import of consumer goods and medicines, 12% - repayment of external loans, 1% - repatriation by foreign investors and the rest 2% purchased for other purposes.

The average monthly number of business entities that purchased foreign currency in the domestic foreign exchange market in January-April 2020 made up 6183, an increase of 723 compared to the same period of last year (5460).

Currency operations of individuals

In the reporting period, the volume of foreign currency sold by individuals through exchange offices reached US$1.5 billion, an increase of 1.7 times compared to the same period of last year (the first four months of 2019 - US$884 million). At the same time, individuals bought foreign currency in the amount of US$1.17 billion, which is 3.4 times higher than the same period of last year (US$346 million).

At the same time, in the last ten days of April 2020, the average daily volume of foreign currency sold by individuals to banks increased 2.5 times compared with the average daily sales in the first and second decades, amounting to US$9.6 million (in the first and second decades - US$3.8 million).

In January-April 2020, the volume of currency funds received in the republic through international money transfer systems made up US$1.3 billion, decreasing by US$161 million or 11% compared to the same period of the previous year.

Also in April of this year, US$250 million was received through international money transfer systems. This indicator decreased by 15% compared with March. At the same time, in the last decade of the month, an increase in the average daily volume of international money transfers by 1.7 times was observed compared with the first and second decades of the month (from US$6.7 million to US$11.5 million).

Foreign currency offer

The total supply of foreign currency in the foreign exchange market (excluding Central Bank interventions) in January-April 2020 made up US$2.7 billion, remaining at the level of the first four months of 2019.

In the reporting period, business entities sold US$1.7 billion, which is at the level of the corresponding period of 2019.

The Central Bank’s foreign exchange interventions in the reporting period were based on the principle of neutrality of gold and foreign exchange reserves. Since the beginning of this year, the Central Bank’s foreign exchange interventions amounted to US$1.5 billion and were within the range of monetary gold purchased from domestic manufacturing enterprises during this period.

In the structure of import financing sources, in January-April 2020, the share of funds acquired (conversion) in the domestic foreign exchange market made up 56%, the share of import financing from own funds in foreign currency amounted to 19%.

In the corresponding period of 2019, these indicators were 55% and 21%, respectively.

Exchange rate dynamics

The dynamics of the national currency exchange rate in the domestic foreign exchange market was formed taking into account the ratio of the current level of supply and demand, as well as internal and external factors.

As a result, during the first quarter of this year, the national currency depreciated by 0.8% (from 9501 soums / dollar to 9577 soums / dollar).

In April of this year, the devaluation of the national currency amounted to 5.8%. This is explained by the growth of devaluation expectations of business entities and the population associated with the depreciation of the currencies of the countries-major trading partners, starting from the last decade of March, as well as with the formation of an imbalance of supply and demand in the domestic foreign exchange market.