In recent months, the value of the dollar in the Uzbek market has continued to decline. This movement of the exchange rate made many think about one question: if the dollar is getting cheaper, why aren't prices falling?
Today, the value of the dollar in international markets is decreasing, while the price of gold is, on the contrary, rising. This is considered a natural economic situation.
"Gold prices continue to rise in the US due to Trump's policies. When the dollar becomes cheaper, people switch their funds to gold for security reasons. This situation is beneficial for Uzbekistan - our country has effectively used these conditions and increased the volume of gold exports to 30% since the beginning of the year," says economist Turakulov.
According to the economist, due to the increase in the amount of dollars in the market in this process, its price is decreasing. However, this situation does not lead to a decrease in prices, but rather to an increase in inflation to a certain extent.
"After the sale of gold, a large amount of currency is entering the country. This increase in money circulation will increase the purchasing power of the population, and if demand increases, prices will also rise," the expert said.
Why aren't prices falling?
According to Turakulov, there are several reasons for this:
-Imported goods are still purchased in dollars, so there is no immediate impact on the domestic market.
-The inflation rate in the country has increased, which keeps prices at a high level.
-There is a law in economics called "sticky price" - when prices rise, it's not easy to lower them again.
"Even if the dollar falls, market prices will not automatically decrease. This process takes time, sometimes it takes years," the economist emphasizes.
Is the sum strengthening?
According to Valijon Turakulov, the currency of a strong economy will also be stable. In Uzbekistan, the value of the sum has increased to a certain extent in recent years - by approximately 10-15% compared to 2018-2019.
In his opinion, two factors influenced this situation:
- increase in dollar inflow into the country;
- global geopolitical changes, including a decline in the overall value of the dollar due to Trump's policies.
Internal growth factors
According to the economist, the economy of Uzbekistan has shown significant growth in recent months. According to the forecasts of the International Monetary Fund, Uzbekistan leads among the countries of Central Asia with a growth rate of more than 7 percent.
"This growth is due not only to gold exports, but also to the funds sent by migrants. People are earning more money, spending more - this increases economic activity. But if demand grows rapidly, inflation will also accelerate," Turakulov concluded.
Thus, it is said that it is economically logical that prices do not fall even if the dollar falls. According to economists, restoring market equilibrium requires time, stable policy, and careful cash flow control.
Read “Zamin” on Telegram!
