Uzbekistan's gold and foreign exchange reserves partially recovered after June decline

Uzbekistan's gold and foreign exchange reserves have partially recovered after a decline in June. According to the Central Bank, as of August 1, the country's gold and foreign exchange reserves increased by $590 million, from $63.76 billion to $64.35 billion.

In July, foreign exchange reserves increased by $209 million, from $7.44 billion to $7.65 billion.

For the first time since the appearance of securities in the composition of international reserves, their volume decreased. In July, this portfolio decreased by about $1.1 billion, or almost 40 percent, from $2.86 billion to $1.76 billion.

At the same time, the volume of cash currency and deposits increased by $1.31 billion, from $4.58 billion to $5.89 billion.

The value of gold in reserves increased by $365 million, from $55.76 billion to $56.12 billion.

However, the physical volume of gold decreased slightly - from 13.88 million troy ounces to 13.85 million troy ounces (430.8 tons). This decrease amounted to about 30.2 thousand troy ounces, or about 0.94 tons. Thus, the volume of gold decreased after the record level on July 1.

Despite the decrease in the physical volume of the precious metal, the increase in world prices maintained the value of the gold part of the reserves.

According to the Central Bank's commentary on the statistics, the price of gold in July increased from $4,016.7 to $4,052.2 per troy ounce, or about 0.9 percent. The regulator estimated the positive effect from the gold revaluation at $490 million.

This means that the increase in the value of gold reserves due to the increase in quotations was partially offset by a decrease in its physical volume.

For comparison, as of July 1, Uzbekistan's gold and foreign exchange reserves had suddenly decreased by $6.8 billion - from $70.6 billion to $63.8 billion. At that time, the main reason was the fall in gold prices: its price fell from $4,516.85 to $4,016.7 per troy ounce, and the Central Bank estimated the negative effect of the revaluation at about $6.9 billion.

The Central Bank previously explained the high share of gold in international reserves by a conservative approach to asset management. At the same time, the regulator is gradually diversifying reserves to reduce dependence on fluctuations in the price of precious metals.

International reserves serve as one of the instruments of the country's financial stability. They are used to meet external obligations, support the foreign exchange market when necessary, and finance critical imports during periods of external shocks.