TOPIC OF THE WEEK: Non-gold exports put a floor under the Uzbek som
My readers know that I prefer to look at FX developments in the CCA region chiefly through the prism of the Russian RUB. I have repeatedly argued that this provides the best first-order approximation of the various other relevant factors affecting currency behavior in the region. This time around I take a more narrative approach in explaining in more detail the underlying reasons for the continuing constructive evolution of the Uzbek som (UZS), which, interestingly, has materialized against the backdrop of a weakening RUB.
Uzbekistan’s widening trade deficit should be set against a decisive improvement in the broader BoP balance. The UZS gained about 7% in 2025 as robust gold exports and remittances briefly pushed the CA into surplus during the first three quarters of the year, while record-high net financial inflows in the financial account of US$11.2bn comfortably exceeded the full-year US$5.7bn CA deficit. Broader US$ weakness, higher gold prices and, in particular, a much stronger Russian ruble amplified these domestic tailwinds.
The UZS resilience so far in 2026 looks more structural, if somewhat less convincing given the softer RUB. Despite much lower gold exports, non-gold shipments rose very strongly, by 31.5% YoY in 1H26, remittances increased 13.4%, and external borrowing remained strong. Tight real monetary conditions, the CBU's accumulated FX buffer and growing household conversion of US$ savings into UZS have provided additional support, suggesting that Uzbekistan’s foreign-currency earning base is becoming broader and less gold-dependent.
For investors the key takeaway is, of course, not that the UZS has become a permanently appreciating currency, but that its historic one-way depreciation regime appears to have broken down in a more sustainable manner. FX performance is now determined by competing trade, capital, remittance and savings flows. Risks remain—notably weaker Russian labor demand, ruble depreciation, volatile gold prices and potential capital-flow reversals—but future som depreciation is likely to be more modest and less automatic than in the past.
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