Uzbekistan’s international reserves fell from $34.6 bn to $32.2 bn, a decrease of roughly 6.94% in Q1 2024, the Central Bank of Uzbekistan reported. The foreign currency reserves, held in convertible foreign currencies, also decreased. Starting the year at $9.4 bn, they fell to $7.6 bn by the end of March, a decrease of approximately 19.4%.
Infographics: Sabina Aliyeva
Interestingly, the volume of gold reserves remained relatively stable over the quarter, but there were price fluctuations in its value. The volume of gold reserves was worth $24.6 bn in January, peaked at $24.9 bn in February, and fell slightly to $24.1 bn in March.
The main factor of an almost $2.4 bn decrease in Uzbekistan’s international reserves was the sale of foreign currency to cover the trade deficit - $1.82 bn worth of foreign currency was sold, the rest of the decline is explained by sovereign Eurobonds worth $500 mn maturing in late February.
- Bekhruzbek Ochilov, IBD at Alkes Research stated.
The Central Bank of Uzbekistan stated that the recent decrease in international reserves is due to “seasonal factors” typically seen in January and February. However, when comparing this to data from the same period in 2022-2023, the reserves remained relatively stable. The bank also noted that the repayment of a portion of the sovereign Eurobonds issued in 2019 influenced these dynamics. Specifically, Uzbekistan was scheduled to repay $500 mn worth of Eurobonds on February 20.
Other factors that might contribute to the decrease of international reserves of Uzbekistan:
- Trade deficit. A significant portion of the decline in reserves is attributed to currency sales amid a growing trade deficit. This means that the country was importing more goods and services than it had been exporting, leading to an outflow of foreign currency.
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Depreciation of the Uzbek soum and Russian ruble. The depreciation of both the Uzbek soum and the Russian ruble led to lower inflows of foreign currency from trade and remittances. Russia is a major trading partner and a destination for Uzbek migrants, therefore changes in the Russian economy can have a significant impact on Uzbekistan’s reserves.
Journalist - Sabina Aliyeva
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