THE ECONOMIC CONSEQUENCES OF FINANCIAL LIBERALIZATION AND EXCHANGE RATE REFORM IN UZBEKISTAN: EVIDENCE FROM THE 2017–2025 TRANSITION PERIOD
Keywords:
uzbekistan, financial liberalization, exchange rate reform, economic consequences, transition economy, macroeconomic stability, private sector growthAbstract
Uzbekistan embarked on comprehensive financial liberalization and exchange rate reforms in 2017, marking a significant departure towards a market-oriented economy with aims to enhance macroeconomic stability, attract foreign direct investment, and foster private sector growth. Understanding the multifaceted economic consequences of these intertwined reforms during the 2017–2025 transition period is crucial. The aim of this study is to analyze these economic consequences through a systematic literature review, drawing from academic databases and international financial institution reports, with a focus on English-language publications from 2020 onwards. The analysis reveals that financial liberalization demonstrably contributed to deepening financial intermediation, improved allocation of financial resources, and expansion of credit to the private sector, fostering private sector growth and financial inclusion. Concurrently, the exchange rate reform, initiated in September 2017, led to an initial significant depreciation of the Uzbek Som and positively impacted non-resource exports, contributing to a more diversified export base. However, it also introduced periods of increased exchange rate volatility and inflationary pressures. These reforms have fundamentally reshaped Uzbekistan's economic landscape, necessitating robust regulatory frameworks to manage financial stability challenges and exchange rate fluctuations.
References
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20. Title nearly duplicates another source — verify both: [3] IMF. (2021). Uzbekistan: 2021 Article IV Consultation—Press Release; Staff Report; and Statement by the Executive Director for Uzbekistan. IMF Country Report No. 2021/256.
21. Title nearly duplicates another source — verify both: [4] IMF. (2020). Uzbekistan: 2020 Article IV Consultation—Press Release; Staff Report; and Statement by the Executive Director for Uzbekistan. IMF Country Report No. 2020/266.
22. Title nearly duplicates another source — verify both: [6] World Bank. (2023). Uzbekistan Economic Update: October 2023.
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24. Title nearly duplicates another source — verify both: [16] Khasanov, M., & Khasanova, M. (2020). Financial Liberalization and Economic Growth in Uzbekistan. Journal of Economic Development, 45(4), 1-20.
25. Title nearly duplicates another source — verify both: [19] Sardor, A., & Khasanov, M. (2024). Financial Development, Institutions, and Economic Growth in Uzbekistan. Economic Systems, 48, 101116.
