Uzbekistan's hard currency reserves increased by $1.6bn in July 2024, reaching $37.4bn, the Central Bank of Uzbekistan reports. This represents a 4.4% increase from the previous month and a new high for the period with available data. The reserves now average 12 months of import coverage, compared to a previous level of 20 months.
The hard currency share of the reserves experienced volatility over the two months. In June, the reserves fell by $796.8mn, bringing the total to $8.5bn. However, in July, the reserves saw a further reduction of $781.6mn, resulting in a new balance of $7.6bn. This indicates ongoing challenges in maintaining currency reserves amid fluctuating foreign exchange markets.
Gold reserves played a crucial role in the overall increase of Uzbekistan's hard currency reserves. In July, Uzbekistan refrained from selling gold for the second consecutive month. The physical volume of gold reserves increased by 310,000 ounces, reaching 12mn ounces, while the monetary value of these reserves rose by $1.8bn to $29.1bn.
During this period, gold prices advanced to $2,480 per ounce. The sustained stability in gold sales can be attributed to several factors:
- Favorable import levels
- Inflows from Eurobonds issued by state banks
- A resurgence in remittance growth
In 1H24, Uzbekistan sold $4.2bn worth of gold abroad. The global demand for gold remains robust, driven by investors' desire to diversify portfolios and protect against risks. The trading volume of semi-processed gold at the end of 2023 increased by 12.5%, exceeding $145bn.
In June 2024, Uzbekistan was identified as a leading global buyer of gold, according to a World Gold Council report. Since the start of 2024, Uzbekistan has sold a net volume of 7 tons of gold, placing it third in global gold sales, following Thailand with 10 tons and the Philippines with 25 tons. Key buyers during this period included Turkey, India, and China, reflecting strong demand for gold in these regions.
Although Uzbekistan's gold sales were surpassed by the Philippines and Thailand earlier this year, the Central Bank of Uzbekistan demonstrated significant activity in the gold market by acquiring considerable quantities of the metal.
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