Central Bank of Uzbekistan Considering Purchase of Developed Nations’ Sovereign Bonds to Diversify Reserves

Tashkent, Uzbekistan (UzDaily.com) — The Central Bank of Uzbekistan is exploring the possibility of expanding its portfolio of instruments to diversify foreign exchange and gold reserves through the purchase of government bonds from developed countries, Sanjar Valiyev, Head of the Department for International Reserves Management, said at a media dialogue.

According to him, the initial stage of diversification was linked to the acquisition of U.S. Treasury bonds, which are characterized by high liquidity. “Going forward, we plan to consider securities from other developed countries as well,” the representative of the regulator noted.

He clarified that this only concerns sovereign debt instruments, as the purchase of shares in foreign companies is not under consideration.

In May 2024, the Central Bank made its first investment in foreign government securities, allocating US$35 million. Later in the autumn, the regulator purchased an additional US$65 million worth of U.S. Treasuries, bringing the total to more than US$101 million by the end of the year.

In January, Deputy Chairman of the Central Bank Abror Mirzo Olimov reaffirmed the intention to continue investing in U.S. government bonds, stressing that the diversification strategy is focused solely on risk-free assets, excluding cryptocurrencies.

Uzbekistan’s foreign exchange and gold reserves reached a historic high in August, increasing by US$1.34 billion and surpassing US$50 billion. The value of gold held by the Central Bank exceeded US$40 billion for the first time, driven by rising metal prices and an increase in reserves to 11.8 million troy ounces.

By early September, foreign currency reserves stood at just under US$9.5 billion, down by US$49.3 million. Meanwhile, the value of U.S. Treasury securities in the Central Bank’s portfolio rose by US$4.2 million, reaching US$1.016 billion.