Microsoft Word econ 2004 16. doc

4. Conclusion 
In 2002, the Government of Uzbekistan has signed a Memorandum with the 
International Monetary Fund, in which Uzbekistan pledged to unify foreign 
exchange regimes and liberalize its financial system. In particular, the rule limiting 
enterprises to one account, cash withdrawal limits, government’s intervention into 
credit policy of commercial banks were be abolished. 
To fulfil its obligations the Government of Uzbekistan has undertaken 
unprecedented measures. It decided to reduce demand for and encourage supply of 
foreign currency on the black market. Demand was reduced by putting tough 
constraints on the “consumers”, which are predominantly small businesses 
(including so called “shuttle traders”) that did not have access to official sources of 
FX. The supply of foreign exchange was encouraged by creating a shortage of 
local currency (through delays in wage payments) forcing the population to 
exchange their foreign currency cash savings to pay for everyday expenses.
Regarding financial sector liberalization, there have been a number of regulatory 
changes adopted, but the implementation of many of them has been uneven. The 
Central Bank used its time-honoured technique of sending “secret” or “oral” 
orders that in fact were opposing the implementation of “liberalizing” decrees. 
This seriously undermined trust in the commitment of Uzbekistan’s authorities to 

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make necessary reforms and credibility of the government in the eyes of strategic 
foreign investors. 
5. Notes 
1.
Latest revision has been made as of February, 2001 
2.
Paid in capital of UZS 200 mln., UZS 300 mln. total assets, 500 
shareholders, one-year profitability. Slightly different requirements apply 
to banks. 
3.
Paid in capital of UZS 1 bln., UZS 1.5 bln. total assets, 2000 shareholders, 
three-year profitability. Slightly different requirements apply to banks. 
4.
In 2002, trading on the curb market was more than UZS 20 bln., compared 
to UZS 4.6 bln. For the RSET and UZS 600 000 for the “Elsis Savdo” 
(Asian Development Bank, 2003). 

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