Uzbekistan's gold and foreign exchange reserves decline for the third month in a row

The official reserve assets of Uzbekistan as of November 1 amounted to $33.3 billion, international reserves – $32.4 billion, follows from the Central Bank data.

The country’s reserves are still very poorly diversified – almost everything is stored in the form of gold ($19 billion) and foreign currency ($13.9 billion). It is planned to solve this problem by purchasing US Treasury bonds.

Gold and foreign exchange reserves are declining for the third month in a row. Uzbekistan has been actively selling gold since the start of the pandemic to keep the country’s economy afloat. If at the beginning of the year there were 10.8 million troy ounces of gold in reserves, then by November, it declined to 10.2 million (in September it was 9.6 million).

The reason for the reduction in assets was again foreign currency – its reserves now amount to $13.9 billion (last month it was $14.5 billion).

Reserves, among other things, are considered a “safety cushion” for the country – they are needed as a buffer in case of adverse external shocks, and the adequacy of reserves directly depends on the nature of these shocks. The current reserves will be enough to finance about 20 months of imports.

This is much more than the indicator recommended by international organizations for developing countries, which is three months.