INTERNATIONAL EXPERIENCE IN THE FORMATION OF EXCHANGE RATES BASED ON MARKET MECHANISMS AND THE POSSIBILITIES OF ITS USE IN UZBEKISTAN

Abstract

Economic circumstances and conditions in the country, policy preferences play significant role in the choice of the foreign exchange regime. Therefore, main trade-offs among the choice of foreign exchange regimes are based on the conditions and credibility of policymaking and its institutions. In fact, there is no single ideal exchange rate regime which suits for all countries. The choice of exchange rate regimes is based on the relative weight of such factors mentioned above. Moreover, choice of exchange rate regimes varies over time that country changes its exchange rate regime based on the changing economic and political circumstances. In most of the cases, change in exchange rate regime in the country is driven by deficit in balance of payments, low economic growth and currency crisis.