Identifier
Created
Classification
Origin
07TASHKENT1995
2007-11-19 10:04:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Tashkent
Cable title:
EURO REPLACES USD IN OFFICIAL ACCOUNTING AND
how-toVZCZCXRO9905 PP RUEHDBU DE RUEHNT #1995 3231004 ZNR UUUUU ZZH P 191004Z NOV 07 FM AMEMBASSY TASHKENT TO RUEHC/SECSTATE WASHDC PRIORITY 8787 INFO RUEHAH/AMEMBASSY ASHGABAT 3459 RUEHTA/AMEMBASSY ASTANA 9669 RUEHEK/AMEMBASSY BISHKEK 4075 RUEHDBU/AMEMBASSY DUSHANBE 3938 RUEHBUL/AMEMBASSY KABUL 1977 RUEHBS/USEU BRUSSELS RUEHVEN/USMISSION USOSCE 2138 RHEHNSC/NSC WASHINGTON DC RHEFDIA/DIA WASHDC RUEAIIA/CIA WASHDC RUCPDOC/DEPT OF COMMERCE WASHDC
UNCLAS TASHKENT 001995
SIPDIS
SENSITIVE
SIPDIS
DEPT FOR SCA/CEN
E.O. 12958: N/A
TAGS: ECON EFIN UZ
SUBJECT: EURO REPLACES USD IN OFFICIAL ACCOUNTING AND
TOURISM SECTOR
SENSISTiVE BUT UNCLASSIFIED--PLEASE PROTECT ACCORDINGLY.
UNCLAS TASHKENT 001995
SIPDIS
SENSITIVE
SIPDIS
DEPT FOR SCA/CEN
E.O. 12958: N/A
TAGS: ECON EFIN UZ
SUBJECT: EURO REPLACES USD IN OFFICIAL ACCOUNTING AND
TOURISM SECTOR
SENSISTiVE BUT UNCLASSIFIED--PLEASE PROTECT ACCORDINGLY.
1. (SBU) Summary: The Uzbek Government officially switched
from USD to euros for accounting and financial management.
The tourism industry followed suit, and is also raising
prices to keep up with high inflation. The GOU likely is
concerned over the depreciation of its USD 2.3 billion in
reserves. End summary.
2. (U) On November 7, a Presidential Resolution was announced
instructing banks to switch from USD to euros in accounting
and financial management. Starting on January 1, 2008, the
minimum charter capital for local banks will be fixed to the
euro equivalent: five million euros for commercial banks and
2.5 million euros for private banks.
3. (SBU) In connection with this resolution, the tourism
sector appears to be adopting the euro as well. The
state-owned Uzbek Airways recently changed its price scheme
to euros. In Tashkent, restaurants catering to tourists have
new menus with only euro pricing. These restaurants have
taken the opportunity to increase prices by as much as 25-40
percent as well. (Note: This price hike reflects the
unofficial inflation rate, but the tourist restaurants are
the only ones so far to raise prices so drastically. End
note.) Econoff has heard reports that in the tourist cities
of Bukhara and Samarkand, vendors are speaking in euros, not
dollars.
Comment
--------------
4. (SBU) Only one year ago, it was difficult to exchange
euros into soum easily . The tourism sector, aware of global
market forces, is reacting (if not over-reacting) to the
depreciation of the USD. The average entrepreneur and small
size enterprises have yet to react similarly, though
eventually they will catch on.
5. (SBU) The depreciation of the US dollar worries the
government, especially as it holds over USD two billion in
reserves. In the GOU's mind, the more reserves it has, the
more independent it is. Uzbekistan's gold exports have
fallen this year. While a main reason for this may be the
loss of its American business partner, Newmont Mining, it is
also possible that Uzbekistan is stockpiling gold in order to
protect against its depreciating reserves.
NORLAND
SIPDIS
SENSITIVE
SIPDIS
DEPT FOR SCA/CEN
E.O. 12958: N/A
TAGS: ECON EFIN UZ
SUBJECT: EURO REPLACES USD IN OFFICIAL ACCOUNTING AND
TOURISM SECTOR
SENSISTiVE BUT UNCLASSIFIED--PLEASE PROTECT ACCORDINGLY.
1. (SBU) Summary: The Uzbek Government officially switched
from USD to euros for accounting and financial management.
The tourism industry followed suit, and is also raising
prices to keep up with high inflation. The GOU likely is
concerned over the depreciation of its USD 2.3 billion in
reserves. End summary.
2. (U) On November 7, a Presidential Resolution was announced
instructing banks to switch from USD to euros in accounting
and financial management. Starting on January 1, 2008, the
minimum charter capital for local banks will be fixed to the
euro equivalent: five million euros for commercial banks and
2.5 million euros for private banks.
3. (SBU) In connection with this resolution, the tourism
sector appears to be adopting the euro as well. The
state-owned Uzbek Airways recently changed its price scheme
to euros. In Tashkent, restaurants catering to tourists have
new menus with only euro pricing. These restaurants have
taken the opportunity to increase prices by as much as 25-40
percent as well. (Note: This price hike reflects the
unofficial inflation rate, but the tourist restaurants are
the only ones so far to raise prices so drastically. End
note.) Econoff has heard reports that in the tourist cities
of Bukhara and Samarkand, vendors are speaking in euros, not
dollars.
Comment
--------------
4. (SBU) Only one year ago, it was difficult to exchange
euros into soum easily . The tourism sector, aware of global
market forces, is reacting (if not over-reacting) to the
depreciation of the USD. The average entrepreneur and small
size enterprises have yet to react similarly, though
eventually they will catch on.
5. (SBU) The depreciation of the US dollar worries the
government, especially as it holds over USD two billion in
reserves. In the GOU's mind, the more reserves it has, the
more independent it is. Uzbekistan's gold exports have
fallen this year. While a main reason for this may be the
loss of its American business partner, Newmont Mining, it is
also possible that Uzbekistan is stockpiling gold in order to
protect against its depreciating reserves.
NORLAND