16 May 2023

Uzbekistan’s international reserves shrank by $230 million in April

Uzbekistan’s international reserves in April decreased by $230 million to a total of $35.2 billion. The decline was mainly due to a reduction in foreign currency reserves. This was reported by “Gazeta.uz”.

According to data from the Central Bank, Uzbekistan’s official reserve assets stood at $35.2 billion as of May 1, 2023, dropping by $230 million in April.

Foreign exchange reserves keep declining, reaching $9.93 billion (-$181.4 million). Foreign exchange reserves have decreased by $1.71 billion since the start of the year.

The gold reserves’ worth dropped by $50 million to $24.2 billion. The physical amount of the precious metal fell by 0.1 million troy ounces (3.1 tonnes) to 12.1 million troy ounces (around 379.4 tonnes). This may suggest that Uzbekistan exported gold in April.

The decline in “gold” reserves came amid a rise in gold prices — its quotations in April rose from $1,999 to $2,034 per ounce.

The precious metal is rising in price amid the crisis in the US and European banking sector and the collapse of financial companies’ stocks. Vladimir Chernov, an analyst at Freedom Finance Global, said the upward trend in the precious metal’s quotations is due to the expected end of the US Federal Reserve’s tightening of monetary policy, which was hinted at by regulator Chairman Jerome Powell following the May meeting.

“Against this backdrop, the likelihood of a weaker dollar with a parallel rise in the price of commodities denominated in that currency, including gold, is increasing. The increased demand for the metal is also due to its protective status amid uncertainties about the situation with the regional U.S. banks and the risks of a global recession,” — emphasized the expert.

The available reserves exceed the country’s imports for 2022, which amounted to $30.67 billion. According to the recommendations of international organisations for developing countries, reserves should cover at least three months of imports.