TASHKENT, June 28: Uzbekistan, at odds with international lenders over slow economic reforms, pledged after 10 days of IMF talks on Friday to lift rigid controls over its national sum currency as early as November.

But International Monetary Fund officials pressed the Central Asian state for more concrete steps towards liberalising its isolated economy, propped up in recent months by high global gold and cotton prices.

Uzbek Deputy Prime Minister Rustam Azimov told a news conference late on Friday the authorities had sent a letter to IMF Managing Director Horst Koehler, outlining a set of reforms aimed at achieving convertibility on current transactions.

This (programme) will also make it possible for the government to see the economic situation and the economic programme in the clear light of a market-determined currency policy and not in the rosy light of the overvalued exchange rate, IMF mission head Erik De Vrijer said.

A market exchange rate which is not overvalued will allow exporters to be more competitive and will also allow domestic producers to better counter competition from abroad, he said.

The IMF’s resident mission left Uzbekistan in March 2001 in protest at Tashkent’s sluggish reforms and at its reluctance to scrap a multiple exchange rate system. In the ranking of countries, Uzbekistan’s economy belongs to the most closed ones in our membership, De Vrijer said.

But Azimov said he saw a concrete breakthrough in the key issue of currency convertibility.

We hope that in November the liberalisation of the currency market will be finished, not just de facto but de jure, he said. Stabilising the currency market and moving to unrestricted convertibility open good prospects for further deregulation of the foreign trade regime.

The sum, quoted by the central bank at 980 to the dollar, is today traded at similar levels on the bustling black markets of Tashkent. A year ago, street rates hit 1,500 sums.

Businessmen say it was not concerted government policy which balanced the exchange rate, but the central bank’s rigid compression of money supply, draconian taxes slapped on private traders and limited imports.

Impoverished ex-Soviet Uzbekistan relies heavily on gold and cotton exports, while the inefficient economy is heavily regulated and run largely along command lines.

The IMF froze a $180m stand-by loan to Uzbekistan in 1996 when Tashkent started printing money and limited convertibility after a paltry cotton harvest.

Azimov said the government’s new reforms aimed not to get a new handout of loans, but to change the economy fundamentally.—Reuters