Uzbekistan's official reserves increased by almost $1.5bn compared to March.
As of April 1, 2023, the gold and FX reserves amounted to $35.4bn.
FX rose by $42.8mn (a total of $10.1bn), while gold - by $1.4bn (a total of $24.2bn).
The sharp rise in gold prices accounted for this upward trend in March.
Although the amount of gold in the country's reserves decreased by 10 tons compared to February, the high costs caused an increase in the value of gold reserves.
In recent months, Uzbekistan has been actively exporting gold due to rising costs. In January, the country became the main seller of gold in the world. In February, Uzbekistan stopped selling gold because prices began to fall.
In March gold started to rise again, and prices hit a 13-month high. Favorable prices and reduced reserves lead to estimates that Uzbekistan may have sold up to 20 tons of gold.
In 2022, when gold was at its lowest level in several years, the Central Bank of Uzbekistan reportedly did not sell gold for seven months and was one of the main buyers of gold during this period.
Why are gold reserves needed?
In simple terms, this is insurance, the "safety cushion" of the state. Stockpiles are available in almost all countries of the world for emergencies.
Reserves are usually kept in highly liquid assets, i.e. assets that sell quickly. Gold and FX meet these requirements — they can be used for debt repayment or investments at any time.
Until 2017, information about Uzbekistan's reserves was not disclosed to the public. In November of the same year, it was announced that the reserves amounted to $26bn. Since then, they have grown to $10bn.
What are the uses of reserves and how are they filled?
Reserves are used differently in various countries. This usually includes financing the balance of payments deficit, conducting interventions in the foreign exchange market, maintaining the national currency exchange rate, covering foreign debts, etc.
Reserves are replenished at the expense of gold mined in the country, issuing securities to the international market, trade balance surplus, etc.
For example, reserves in Uzbekistan are replenished at the expense of gold mined by Almalyk Mining and Metallurgical Complex (AGMK) or Navoi Mining and Metallurgy Combinat (NGMK). When gold is sold abroad, the country's reserves also decrease.
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