Why is this important
The dollar exchange rate fell below 12,100 soums — the psychological mark — for the first time since the beginning of the year. The strengthening of the soum by 6.2% reduces import inflation, but hits exporters: their products are rising in dollars. Record gold prices ($3,800+) and remittances ($13.9 billion) continue to support the national currency. The euro plummeted by 71 soums — the largest daily decline in months.
What happened
- The dollar fell by 20.13 soums to 12,005.09 (-0.17%);
- Banks sell dollars for 12,025, buy for 12,000;
- The sum strengthened by 6.2% since the beginning of the year.
The euro’s 71 soum drop is the largest daily decline in months due to the strengthening of the dollar in global markets and the soum against the European currency. The Russian ruble decreased insignificantly by 0.80 soums, indicating the relative stability of the Russian currency.
Context
Exporters (textiles, fruits, vegetables) lose competitiveness — their products become more expensive in dollars. Importers benefit — equipment and raw materials become cheaper. For inflation, a strong soum reduces import inflation and helps the Central Bank achieve the 8% target.
If the trend continues, the dollar exchange rate may drop below 12,000 soums by the end of the year. However, the Central Bank can intervene to prevent the soum from strengthening too strongly, which will hit exporters hard.
