Tashkent, Uzbekistan (UzDaily.uz) — The Uzbek soum has surrendered part of its gains from September, weakening by approximately 1.6% against the US dollar over the past two weeks. However, the recent movement appears to be a correction following a prolonged period of appreciation rather than the beginning of a sustained depreciation trend.
Over the two-week period between market reviews, the US dollar rose from approximately 11,785 soums to 11,980 soums, an increase of nearly 1.7%. The movement effectively returned the Uzbek currency to levels last recorded in early August.
The most significant exchange rate changes occurred during the second half of October, following an extended period of consolidation in which the dollar traded within a relatively narrow range of 11,750–11,800 soums.
After remaining within that range, the dollar advanced rapidly towards the psychologically important threshold of 12,000 soums.
The adjustment appears consistent with a market correction following the national currency's sustained appreciation during August and September.
At the same time, domestic demand for foreign currency remains elevated, reflecting developments in Uzbekistan's external trade.
During January–August, imports increased by 16.3%, while exports declined by 3.4%.
Strong growth in retail trade, services and real household incomes continues to support domestic consumption, but it is also generating additional demand for imported goods.
As a result, economic activity is having a two-sided effect on the foreign exchange market.
While a growing economy supports the country's underlying economic stability, stronger consumption also increases demand for foreign currency to finance imports.
Nevertheless, the fundamental factors supporting the soum remain in place.
High real interest rates continue to make savings denominated in the national currency attractive, while rising remittance inflows provide an additional source of foreign currency.
These factors suggest that the recent weakening of the soum is more likely to represent a correction after a strong third quarter than the beginning of a longer-term depreciation trend.
Looking ahead, the exchange rate of 12,000 soums per US dollar is expected to become the key reference level for the coming week.
The baseline trading range for the dollar against the soum has been widened to 11,850–12,100 soums.
A sustained move above 12,000 soums could maintain downward pressure on the national currency.
Conversely, stabilisation in demand for foreign exchange could allow the dollar to retreat below that threshold.
The near-term outlook therefore remains dependent on whether foreign currency demand continues to strengthen or begins to stabilise, while the underlying factors supporting the soum remain intact.
