The USD/UZS exchange rate exceeded the 12,000 sum mark per US dollar in October, followed by partial stabilization. At the time of this report, the pair was trading below 11,900, remaining approximately 1% below the start-of-year level.
Economic growth is not the main factor pressuring the national currency. The International Monetary Fund (IMF) raised its economic growth forecast for Uzbekistan in 2026 from 6.8% to 7.8%, and for 2027—from 6% to 6.5%. The World Bank expects growth at 7.9% this year. In the first half of the year, the economy demonstrated an expansion of 8.5%.
The primary source of pressure on the sum remains the situation with trade and the balance of payments. According to the revised IMF assessment, Uzbekistan's current account deficit in 2026 will reach 5.1% of GDP, compared to 3.9% the previous year. Earlier in June, the fund predicted that the deficit would narrow to 3.2% of GDP. The updated forecast indicates that the country continues to spend more abroad on imports and other payments than it earns, which supports demand for foreign currency.
Inflation increased to 6.4% in September compared to 6.2% in August, marking the first acceleration in three months. This figure remains above the target level set by the Central Bank of Uzbekistan at 5%. Gasoline prices rose by 20% year-on-year, while propane gas prices increased by nearly 49%.
Uzbekistan's key rate is set at 14%, and the next monetary policy decision is scheduled for October 28. Given the acceleration in inflation, a rate cut appears unlikely. High real interest rates continue to play one of the main roles in supporting the Uzbek sum.
Over 90% of the Central Bank of Uzbekistan's international reserves consist of gold reserves. Consequently, falling gold prices reduce the value of these reserves, even if there is no actual sale of gold. Gold prices continued to fall this week. On Friday, they dropped below $4,000 per troy ounce and briefly fell below $3,990, reaching the lowest level since mid-July. This followed a drop of almost 3% in the previous session.
The decline 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 the US Federal Reserve raising rates at its next meeting is estimated to be less than 10%, this has not yet supported the precious metal.
Gold is also under pressure from high oil prices, which support inflationary risks. Since the end of February, when the conflict between the United States and Iran began, gold prices have fallen by more than 20%, increasing the risk of further decline in the value of Uzbekistan's gold and currency reserves.
The oil market, conversely, shows growth. Brent crude oil traded around $114 per barrel, increasing by almost 4% in a week and approaching the third consecutive weekly rise. Despite oil flows through the Strait of Hormuz almost returning to pre-crisis levels, reports of possible new attacks on Iran following US midterm elections maintain a geopolitical risk premium in prices. This factor may keep oil prices above $100 per barrel until the end of 2026 and maintain upward pressure on fuel prices in Uzbekistan.
Key events next week will be the interest rate decisions by the US Federal Reserve and the Central Bank of Uzbekistan, both scheduled for October 28. Analysts predict that USD/UZS will trade in the range of 11,800–12,100 during the coming week. Maintaining the policy rate unchanged will help preserve high real interest rates and limit the rise of the dollar. However, further acceleration of inflation, additional reserve drawdowns, or another surge in oil prices could increase the likelihood of the exchange rate moving towards 12,100 sums per US dollar.
