IMF Staff Papers - Dezember 2001 - Welfare Effects of Uzbekistan’s Foreign Exchange Regime By Christoph B. Rosenberg and Maarten de Zeeuw -- December 11, 2001

In addition to transferring about 16 percent of GDP from exporters to importers, Uzbekistan’s quasi-fiscal multiple exchange rate regime generates identifiable welfare losses of 2–8 percent of GDP on import markets and up to 15 percent on export markets. These excess burdens have increased substantially with the growing difference among exchange rates. The welfare analysis allows some conclusions regarding the optimal reform strategy: (i) welfare losses will decline overproportionally as exchange rates unify, (ii) exchange rate unification should be supplemented by changing the explicit fiscal system; (iii) at a minimum, Uzbekistan would benefit from moving to an explicit fiscal regime. [JEL F31, H29]