A meeting was held at the Central Bank with experts from the International Monetary Fund (IMF) to discuss the technical assistance report titled “Capital Account Liberalization in Uzbekistan: A Recalibrated Roadmap.”
During the meeting, the management of the Central Bank expressed its appreciation for the technical assistance provided by the IMF and emphasized that the gradual liberalization of capital account transactions is of paramount importance for the country’s macroeconomic stability and the resilience of the banking and financial system.
IMF experts noted that, during the mission, they assessed the ongoing economic reforms in Uzbekistan, recent institutional developments, and the transformation of the financial sector. They also highlighted that more than 25 meetings had been held with representatives of the Central Bank, other regulatory authorities, government agencies, market participants, and investors.
The experts emphasized that capital account liberalization should be pursued when its expected benefits outweigh the associated risks and costs. In particular, decisions regarding the liberalization of capital flows should take into account financial stability considerations, conditions in the foreign exchange market, external sector indicators, and the economy’s capacity to absorb and manage capital flows.
The mission further underscored the importance of aligning capital account liberalization with broader structural reforms, including market-oriented reforms, the privatization of the banking sector, reforms of state-owned enterprises, the reduction of non-performing loans, and the strengthening of macroprudential policy measures.
The updated roadmap is expected to follow a phased approach, focusing first on establishing mechanisms to mitigate economic risks, introducing initial relaxations for low-risk transactions, and subsequently expanding the scope of liberalization in a prudent manner while ensuring consistency with prevailing macroeconomic conditions.
Participants also discussed the importance of maintaining transparent and consistent communication with investors and market participants, as well as strengthening institutional cooperation with the Ministry of Economy and Finance, the Ministry of Investment, Industry and Trade, the National Agency for Perspective Projects, the Tax Committee, and the Customs Committee.
The Central Bank’s management highlighted the importance of studying international experience, particularly gradual approaches to removing existing restrictions and the application of macroprudential policy measures. At the same time, it was noted that issues related to financial inclusion and expanding access to financial services for small and medium-sized enterprises should remain an integral part of the liberalization process.
At the conclusion of the meeting, the parties agreed to continue exchanging views and recommendations on the technical assistance report, finalize the report, and further strengthen cooperation on capital account liberalization initiatives.
