2018 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Republic of Uzbekistan


2018 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Republic of Uzbekistan

Fund Relations

(As of March 31, 2018)

I. Membership Status

Date of membership: September 21, 1992

Status: Article VIII

II. General Resources Account

article image

III. SDR Department

article image

IV. Outstanding Purchases and Loans: None

V. Latest Financial Arrangements

article image

VI. Projected Obligations to the Fund: None

VII. Implementation of HIPC Initiative: Not Applicable

VIII. Implementation of Multilateral Debt Relief Initiative (MDRI): Not Applicable

IX. Implementation of the Catastrophe Containment and Relief (CCR): Not Applicable

Exchange Rate Arrangements

Uzbekistan accepted the obligations of Article VIII Sections 2(a), 3, and 4 of the Fund’s Articles of Agreement with effect from October 15, 2003, and maintains an exchange system free of restrictions on the making of payments and transfers for current international transactions.

At the time of the last Article IV consultation, Uzbekistan maintained two exchange restrictions and one multiple currency practice (MCP) subject to IMF jurisdiction, all of which have been eliminated. First, the exchange restriction arising from undue delays (of up to and exceeding 12 months) in the availability of foreign exchange for payments and transfers for current international transactions has been eliminated. Market participants have confirmed that FX is now available in a timely manner, except for reports of a few specific pre-liberalization requests for FX purchases that are delayed. Staff was informed that the delay was due to an on-going assessment of the relevant transactions. Second, the authorities have ceased the practice of direct rationing in providing FX for payments and transfers for current international transactions and thus, the exchange restriction arising from this action has also been eliminated. Finally, as FX is generally freely available for payments and transfers for current international transactions without undue delay and the use of domestic currency conversion accounts is no longer mandatory, the MCP arising from the lack of interest payments on “blocked accounts” has ceased to exist.

According to Uzbekistan’s authorities, the de jure exchange arrangement is floating. The exchange rate is determined daily based on the supply and demand for foreign currency established on Uzbekistan’s currency exchange. The Central Bank of Uzbekistan (CBU) is a direct buyer of monetary good produced in Uzbekistan, acting as a supplier in the foreign exchange market in amounts equivalent to the volume of gold purchased from producers. The CBU also intervenes in the foreign exchange market to smooth out undue short-term volatility. Foreign exchange sales by the CBU in the FX market are not directed at affecting the fundamental trend of the exchange rate and are driven exclusively by the aim of sterilizing additional liquidity from CBU purchases of monetary gold.

Since September 2017, the sum has stabilized against the U.S. dollar within a 2 percent band. Accordingly, the IMF classifies the de facto exchange rate as a stabilized arrangement, effective September 6, 2017. Previously, the IMF had classified the de facto exchange rate as a crawl-like arrangement.

Article IV Consultation

The Republic of Uzbekistan is on the standard 12-month Article IV consultation cycle. The previous Article IV consultation was concluded on August 31, 2015.

Safeguards Assessment

The CBU is currently not subject to safeguards assessment policy since Uzbekistan is not expected to have a financial arrangement with the Fund in the near future.

Resident Representative

Currently, the Fund does not have a resident representative in Uzbekistan, but maintains a locally staffed office. Previously, a resident representative office was opened in Tashkent from September 1993 to April 2011.

Technical Assistance

(September 2015 to March 2018)

article image

Relations with Selected International Financial Institutions

Asian Development Bank (ADB)

(As of March 2018)

Uzbekistan became a member of the ADB in 1995. In September 2012, the ADB approved a Country Partnership Strategy (CPS), 2012–2016 for Uzbekistan which supported infrastructure development and access to finance. The ADB’s Country Operations Business Plan (COBP), 2018–2020, issued in October 2017 extends the validity of the CPS. It is consistent with recent government initiatives, including the government’s Strategy of Actions on Further Development of Uzbekistan, 2017–2021. The COBP includes operational support for transport, energy, municipal services, health, and access to finance. Support for the key drivers of change—private sector development, regional cooperation, governance, knowledge management, gender equity, and climate change and the environment—is integrated into the operational assistance.

Since 1995 the ADB has approved more loans to Uzbekistan than to any other country in Central Asia. As of December 2017, Uzbekistan had received 67 loans totaling $6.8 billion—including two private sector loans totaling $225 million, $6 million in equity investment, $218 million in guarantees, and $82 million in technical assistance grants. The allocation of the cumulative lending, grant, and technical assistance portfolio was approximately 30 percent to energy; 25 percent to transportation; 20 percent to finance; 10 percent to water, urban infrastructure and services; and 15 percent to other sectors (i.e. agriculture, education, health, industry, and public sector management).

To catalyze private investment, the ADB provides direct financial assistance for non-sovereign public and private sector transactions. For example, under the Trade Finance Program the ADB provides guarantees and loans through partner banks in support of trade. The ADB also provides co-financing for investment and technical assistance projects with government agencies, multilateral banks, and commercial organizations. The ADB closely coordinates programs and projects with multilateral and bilateral development partners, including the Islamic Development Bank (IDB), the Japan International Cooperation Agency (JICA), and the World Bank.

European Bank for Reconstruction and Development (EBRD)

(As of March 2018)

Uzbekistan joined the EBRD in 1992.

The EBRD focuses on identifying potential new projects in areas set out in a Memorandum of Understanding signed with the authorities in March 2017. In the short-term, the EBRD’s work aims to support continuing sustainable economic growth, open market development, and a better investment climate. This includes:

  • Development of micro and small businesses as well as private entrepreneurship including through increasing access to finance and provision of advisory services

  • Modernization and development of the agribusiness, manufacturing and services sectors including supporting mid-sized business and FDI as well as green projects targeting energy and resource efficiency and waste minimization

  • Support of environmental cleanup operations for Uranium legacy sites under the framework of the Environmental Remediation Account for Central Asia.

  • Support for the reforms aimed at improving business climate; private sector development; banking sector strengthening; development of local capital markets; promotion of green economy; support for gender, youth and regional inclusion; and improvement of corporate governance and procurement with the objective to improve economic competitiveness and foster sustainable development.

EBRD Activity in Uzbekistan

article image

As of March 2018, cumulative EBRD activity in Uzbekistan included 60 projects, with total investment of €853 million. The current portfolio totaled €71.3 million, with 63 percent for financial institutions; 36 percent in industry, commerce, & agribusiness; and one percent in infrastructure.

The EBRD provides analysis of Uzbekistan’s economy, including:

A country strategy for Uzbekistan is currently under preparation.

World Bank

(As of March 2018)


The Country Partnership Framework (CPF) for Uzbekistan for 2016–2020 focuses on (i) private sector growth; (ii) agricultural competitiveness including cotton sector modernization; and (iii) improved public service delivery. As such, the CPF remains aligned with Uzbekistan’s National Development Strategy for 2017–2021. The indicative financing envelope is about US$3 billion over the five-year CPF period, with a distribution of one-third of IDA and two-thirds of IBRD financing.

World Bank Portfolio

article image

Uzbekistan has launched a comprehensive reforms process with the adoption of the National Development Strategy for 2017–2021 in February 2017. The World Bank program in Uzbekistan is being adjusted to better respond to the emerged priorities and development vision of the Government. In addition to the traditional financial instruments, new instruments, such as Development Policy Operation, Program for Results and Reimbursable Advisory Services and intensive analytical work, are being programmed or planned to support the Government’s transformative efforts.

Key Engagement

Uzbekistan joined the World Bank in 1992. As of April 2018, the Bank had provided funding for 40 projects financed by the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA) and sponsored more than 50 technical assistance programs via grants. The World Bank’s funding is currently focused on infrastructure investments in the agriculture, water, energy, transport, health, and education sectors. This financing program is appropriate for meeting the large demand for this kind of investment, improving the competitiveness of the economy, and providing the required linkage between policy and investment.

Sixteen IBRD/IDA investment projects, spread across seven sectors and worth US$2.74 billion, are currently under implementation, including the Global Partnership for Education (GPE) grant-financed projects worth US$49.9 million.

As of April 2018, the International Finance Corporation (IFC) had a committed portfolio in Uzbekistan of US$52.7 million invested in nine projects in the financial sector and manufacturing. IFC’s advisory services program is helping the country develop its financial markets and infrastructure, expanding access to finance, upgrading the credit information sharing system, promoting food safety, and increasing water and power efficiency. IFC has launched a new six-year advisory program in Uzbekistan, focusing on developing a sustainable cotton supply chain and on introducing modern, socially and environmentally sound cotton growing technologies and farming practices in the country.

The World Bank also supports the Government’s efforts to enhance the investment climate and business environment by working on improving the country’s Doing Business indicators.

MIGA’s portfolio in Uzbekistan comprised guarantees for a project in the oil and gas sector. MIGA had issued a political risk insurance guarantee for US$119.5 million to BNP Paribas (Suisse) SA of Switzerland to cover a non-shareholder loan to Lukoil Overseas Uzbekistan Ltd. for the Khauzak-Shady Block and Kandym Field Group projects. That guarantee was terminated in FY2017 and no new guarantees have been issued since then.

Statistical Issues

(As of March 31, 2018)

article image
article image

Table of Common Indicators Required for Surveillance

(As of March 31, 2018)

article image

The authorities do not yet supply data to the IMF Statistics Department. The date for the latest observation and the date received reflect when data was transmitted to the area department.

Daily (D); Weekly (W); Monthly (M); Quarterly (Q); Annually (A); Irregular (I); Not Available (NA).

Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

Foreign & domestic bank and domestic nonbank financing.

Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

Currency and maturity composition are not reported regularly.