Tashkent, Uzbekistan (UzDaily.uz) — Uzbekistan’s Central Bank plans to gradually expand the range of assets in which the country’s international reserves are invested.
The regulator intends to look beyond U.S. Treasury securities and consider other highly liquid instruments while maintaining safety and liquidity as its priorities. Central Bank Deputy Chairman Abror Mirzo Olimov made the remarks on 18 September at the International Forum on Public Asset Management in Tashkent, Gazeta reported.
As of the beginning of September, the Central Bank held about 439 tonnes of gold worth around US$65 billion at market prices. Gold accounted for approximately 90% of the country’s international reserves.
Olimov said the high share of gold was not solely the result of the regulator’s investment decisions. Uzbekistan produces around 120 tonnes of gold annually, and the Central Bank has the priority right to purchase it.
“A large share of gold in our reserves is not simply the result of a decision by reserve managers or strategic asset allocation. First and foremost, it is a consequence of the structure of our economy, the domestic gold production ecosystem and, of course, the historically accumulated reserves,” the Central Bank deputy chairman explained.
Over the past five years, Uzbekistan’s international reserves have nearly doubled, from about US$35 billion in 2021 to more than US$72 billion. During the same period, gold holdings increased from 360 to 439 tonnes, while gold’s share of reserves rose from about 60% to 90%.
According to Olimov, the increase in gold’s share reflects a combination of two factors: growth in physical gold holdings and an increase in the global price of the metal.
At the same time, the deputy chairman expects gold to play an increasingly important role in international reserves worldwide. He said that over the past four years, central banks have purchased more than 1,000 tonnes of gold annually, roughly twice as much as in previous decades.
Against this backdrop, Olimov said the issue for regulators was no longer whether gold should be included in reserves, but rather determining its optimal share and approaches to managing such assets.
Uzbekistan’s international reserves exceeded US$72 billion as of 1 September. According to the Central Bank, this amount is about 3.4 times the International Monetary Fund’s minimum benchmark, covers around 14 months of imports and is 4.4 times the country’s short-term external debt.
“For us, the main issue in reserve management is no longer simply accumulating a large buffer. The question is how to manage such a volume of reserves,” Olimov said.
The Central Bank follows three main priorities in managing reserves: safety and preservation of capital come first, followed by liquidity and then returns.
“Our goal is not to maximize profit or returns. It is about improving risk-adjusted returns within clearly defined safety and liquidity constraints,” the regulator’s deputy chairman said.
Olimov also discussed the relationship between gold purchases from domestic producers and domestic liquidity management. Producers mine and refine gold, after which the Central Bank purchases it in the national currency and adds the acquired metal to international reserves.
Payments to producers in soums increase liquidity in the economy. To sterilize this liquidity, the Central Bank uses monetary policy instruments, as well as open-market and foreign exchange market operations.
“That is why, in our case, reserve management, gold accumulation and domestic liquidity management are closely interconnected,” Olimov said.
As reserves increase, the Central Bank is gradually changing its approach to managing them. While the main focus was previously on accumulating reserves, the emphasis is now shifting toward portfolio management.
Since 2020, the Central Bank has cooperated with the World Bank under the Reserve Advisory and Management Partnership (RAMP) programme. The regulator has also begun investing part of its reserves in fixed-income instruments.
The initial amounts invested in such instruments were small but have gradually increased.
“We already have fixed-income securities in our portfolio, and we also have an external manager. We continue to work in this direction,” Olimov said.
The next stage for the Central Bank is to expand the range of investment instruments. In addition to U.S. Treasury securities, the regulator is considering sovereign bonds, bonds issued by subnational authorities and other fixed-income instruments.
At the same time, Olimov said diversification should not automatically mean taking on more risk.
“We do not view diversification simply as adding new types of assets. Before taking on more risks, it is necessary to have the appropriate institutional capacity — to understand, measure and manage those risks,” he said.
In 2026–2027, the Central Bank is working with international financial institutions on strategic asset allocation, investment policy and strategy, as well as the development of an independent risk management system.
Olimov stressed that there is no universally optimal structure for international reserves that applies to all countries. The structure depends on economic characteristics, government obligations, the need for foreign exchange interventions, the structure of the domestic market, the acceptable level of risk and the regulator’s institutional capacity.
As of 1 September, the securities portfolio within Uzbekistan’s international reserves stood at about US$1.77 billion, or approximately 2.4% of total reserves. It increased by only US$3.4 million in August, reaching US$1.766 billion.
By comparison, the portfolio fell by about US$1.1 billion, or nearly 40%, in July, from US$2.86 billion to US$1.76 billion. According to the source, this was the first such decline since securities were introduced into the structure of international reserves.
