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But, Due To Insufficient Export Level As The Result Of Fixed Demand Level For ...

But, due to insufficient export level as the result of fixed demand level for such products, it has been suffering the sharp deficiency of hard currency, gradually resulting in sharp jump-downs of its own currency cycling over the years (IMF, 2004).
Although this kind of situation is considered as favourable for local exporters [enabling them to gain advantage in the world market with low prices], a few factors would need some consideration, such as the economic history: being part of Soviet Economy for 70 years deprived it from its former adaptability to open market, not least leaving a big social and cultural influence, which in turn turned it into the economy somewhat with potential and yet lagging GDP has fallen from 2300 USD per capita in 1991 to 350 USD in 2003 (IMF, 2004) just due to market forces: western markets turned up to be too competitive for former socialist economy(Hakimov &Andersen, 2001).
Throughout the whole time of independence starting from 1991, the government of Uzbekistan and CBU have been jointly trying to avoid default situation and take control of the levels of inflation and hard currency exchange. This strict agenda was one of the reasons of establishing a specialized financial institution in foreign economic activities. So priority was given to attract foreign investments, in order to ensure the inflow of hard currency in both the long and short terms.
Taking into consideration the years passed since opening the market, assumption about the improvements in business expertise and business skills of companies in the country would hold true (Hakimov &Andersen, 2001). So the current business agenda would more likely consist of attracting more investments with the aim of expansion and trying to increase the export volume in the country. Thus, demand for credit/investment products would more likely be too high, thus even creating a pressure for banks.
High demand on the one hand, limited resources due to strict monetary policy of the CBU on the other hand have created the supplier driven financial market in the country. Although NBU have always enjoyed the open doors to both internal and external resources, this situation is still remaining (Hakimov &Andersen, 2001, Abdulhakimov, 1999, Bazarov,2005). In this kind of situations, targets would involve only those businesses with very high ROI and very reliable cash turnover, which is about skimming.
Fig. 1. Competition vs. demand for financial resources

Kotler (2003), Porter (1984) and Johson &Scholes (2002) talk about the oligopolistic competition, with fewer players competing in the market, one type of which would be markets with near inelastic supply to price (here interest rate) and very elastic demand. In those circumstances, banks would more likely be trying to maintain their position and start unofficial or official cooperation by simply maintaining their status-quos and market shares.


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