Tashkent, Uzbekistan (UzDaily.uz) — The USD/UZS exchange rate rose above 12,000 soums per US dollar in October before partially recovering. At the time of writing, the currency pair was trading below 11,900, remaining approximately 1% below its level at the start of the year.
Economic growth is not the main concern for the national currency. The International Monetary Fund (IMF) raised its forecast for Uzbekistan’s economic growth in 2026 from 6.8% to 7.8%, and for 2027 from 6% to 6.5%. The World Bank expects growth of 7.9% this year. The economy expanded by 8.5% in the first half of the year.
The main source of pressure on the soum remains the trade and balance of payments position. According to the IMF’s revised estimate, Uzbekistan’s current account deficit will reach 5.1% of GDP in 2026, up from 3.9% a year earlier.
In June, the fund had forecast that the deficit would narrow to 3.2% of GDP. The revised outlook indicates that the country continues to spend more abroad on imports and other payments than it earns, sustaining demand for foreign currency.
Inflation rose to 6.4% in September from 6.2% in August, marking its first acceleration in three months. The rate remains above the Central Bank of Uzbekistan’s 5% target. Petrol prices increased by 20% year on year, while propane prices rose by nearly 49%.
Uzbekistan’s policy rate stands at 14%, with the next monetary policy decision scheduled for 28 October.
With inflation accelerating, a rate cut is considered unlikely. High real interest rates remain one of the main factors supporting the Uzbek soum.
Gold accounts for more than 90% of the Central Bank of Uzbekistan’s international reserves. As a result, falling gold prices reduce the value of the reserves even if no gold is actually sold.
Gold prices continued to decline this week. On Friday, prices fell below US$4,000 per troy ounce and briefly dropped below US$3,990, their lowest level since mid-July. This followed a decline of nearly 3% in the previous session.
The fall in gold prices was linked to weakening investor interest in artificial intelligence-related assets. Market participants increased gold sales to cover losses on other investments.
Although the probability of a US Federal Reserve rate hike at its next meeting is estimated at less than 10%, this has so far failed to support the precious metal.
Gold also remains under pressure from high oil prices, which are sustaining inflation risks. Since late February, when the conflict between the United States and Iran began, gold prices have fallen by more than 20%, increasing the risk of a further decline in the value of Uzbekistan’s gold and foreign exchange reserves.
The oil market, by contrast, has been rising. Brent crude was trading at around US$114 per barrel, up nearly 4% for the week and heading towards a third consecutive weekly gain.
Although oil flows through the Strait of Hormuz have almost returned to pre-crisis levels, reports of possible new strikes against Iran following the US midterm elections have sustained a geopolitical risk premium in prices. This factor could keep oil above US$100 per barrel through the end of 2026 and maintain upward pressure on fuel prices in Uzbekistan.
The key events next week will be interest rate decisions by the US Federal Reserve and the Central Bank of Uzbekistan, both scheduled for 28 October.
Analysts expect USD/UZS to trade within a range of 11,800–12,100 over the coming week. Keeping the policy rate unchanged would preserve high real interest rates and limit the dollar’s appreciation.
However, a further acceleration in inflation, an additional decline in reserves or another surge in oil prices could increase the likelihood of the exchange rate moving towards 12,100 soums per US dollar.