Uzbekistan issues record low-rate local-currency bonds amounting to $1 billion

For comparison, interest rates on the country’s previous three-year international bonds denominated in the national currency stood at 16.625% (UZS 3 trillion) in 2024 and 15.5% (UZS 6 trillion) in 2025, according to an April 2 statement from the Ministry of Economy and Finance.

Ahead of the issuance, a global investor call was held on April 1 with 32 major international investors from the United States, Europe, the United Kingdom, Asia, and the Middle East. During the call, officials presented details on the goals of the Uzbekistan–2030 Strategy, the progress of ongoing reforms, the current macroeconomic outlook, and future plans.

“Despite ongoing geopolitical tensions in the Middle East, Uzbekistan’s macroeconomic stability and consistent reform trajectory were positively assessed, including continued improvements in its sovereign credit rating”, the message reads.

Strong demand for local-currency instruments prompted authorities to open the order book on the same day.

Nearly 50 foreign investors submitted orders totaling UZS 23.4 trillion – about four times the initially planned volume – at an indicative yield of 12.5%. As a result, Uzbekistan placed three-year sovereign bonds worth the equivalent of $1 billion (UZS 12.2 trillion) at a rate of 12.25%, around 14 basis points below domestic market yields.

Amid global uncertainty, several regional issuers have placed local-currency bonds at higher rates, making Uzbekistan’s issuance stand out.

The deal marks the largest local-currency transaction in Central and Eastern Europe, the Middle East, and Africa (CEEMEA) over the past 15 years.

The bonds are also being considered for inclusion in the Government Bond Index – Emerging Markets (GBI-EM), which could provide access to investors managing around $300 billion in assets and help further reduce borrowing costs.

The index currently includes sovereign bonds from 14 countries, including China, Turkey, Hungary, Brazil, Mexico, Malaysia, Poland, and South Africa.

The issuance is expected to pave the way for other Uzbek borrowers to access global markets in local currency on more favorable terms.

Proceeds from the bonds will be used to finance the state budget deficit, in line with the law on Uzbekistan’s 2026 state budget.