Why did the soum suddenly rise and how did it affect market developments?

The Central Bank of Uzbekistan held an international discussion focused on the importance of a floating exchange rate under the inflation-targeting framework. Participants reviewed global practices aimed at strengthening confidence in the national currency and improving transparency in the financial market.

Deputy Chairman Nodirbek Ochilov emphasized that the exchange rate is determined by market forces and the regulator does not target any specific rate. The Central Bank’s operations follow a principle of neutrality, with interventions limited to the volume of monetized gold purchased during the year.

According to Ochilov, exchange rate volatility is not a sign of instability but evidence of a more flexible market forming. Since early 2025, the sum has strengthened by more than 7 percent against the US dollar due to higher export revenues, moderated import growth, rising foreign investment and remittances.

The appreciation of the sum has helped reduce inflationary pressure on imported goods. Food and non-food inflation dropped to 5.8 percent. Growing trust in the national currency is lowering dollarization in both loans and deposits.

A stronger sum has also eased the burden of external debt. Costs of servicing government and private sector foreign loans have declined, giving the economy additional relief.