Tashkent, Uzbekistan (UzDaily.uz) — The Uzbek soum continues its gradual weakening against the US dollar. As of 17 October, the dollar is trading at 12,800 soums, marking a slight 0.04% decline for the sum over the past week. This minor drop, consistent with earlier signals, reaffirms the soum’s weakening trend.
The unstable position of the Russian ruble continues to influence the soum, as a correlation between the two currencies has been evident over the past 10 months. Currently, the soum appears more stable than the ruble, largely due to the absence of pronounced geopolitical risks affecting it.
Additionally, global risk aversion is putting pressure on the soum’s exchange rate.
On a positive note, Uzbekistan’s foreign exchange reserves reached US$41.13 billion by 1 October, marking a 5% increase in September. This is the highest level since 2013 when reserve data began being tracked. The growth in reserves is largely attributed to an increase in gold holdings, which serves as a prudent hedging strategy.
From a fundamental perspective, this growth in reserves is favorable for the sum’s stability.
Short-term expectations for the USD/UZS pair suggest that the exchange rate will fluctuate within the 12,780-12,850 soums range.
Anna Bodrova,
Alpari analyst
