Loan Dollarization in Uzbekistan Drops to 39 Percent

Tashkent, Uzbekistan (UzDaily.uz) — The level of dollarization in the loan and deposit portfolios of banks in Uzbekistan continued to decline in 2025, according to the financial stability review published by the Central Bank.

The share of loans in foreign currency stood at 39% of the total portfolio as of 1 January 2026, contracting by nearly 4 percentage points over the year. The share of foreign currency deposits decreased from 25% to 21%.

The reduction in loan dollarization mitigates credit risks associated with the deterioration of borrower solvency during exchange rate fluctuations, the regulator noted. A borrower with revenue in soums and debt in foreign currency is the most vulnerable when the national currency weakens.

At the same time, the early warning indicator map included in the same review records an increase in the sensitivity of the banking system to foreign currency risk.

The gap between the foreign currency assets and liabilities of banks expanded during 2025, which led to an increase in the net open foreign currency position. A long foreign currency position intensified the dependence of the financial results of banks on exchange rate dynamics.

The ratio of the bank loan portfolio to GDP decreased by 2 percentage points over the year to 33%.

This is below the lower bound of the interquartile range for countries in Europe and Central Asia, but 7 percentage points above the median for states in Central Asia and the Caucasus. The Central Bank interprets the decline in this indicator as a reduction in the overall debt burden in the economy.

Separately, the regulator drew attention to the widening gap between interest rates on loans in the national currency and the yield on treasury bonds.

Loan rates are declining more slowly than rates on government securities, which indicates a rising credit risk premium as banks assess borrower risks higher than before.