Uzbekistan doubles bond issues

Uzbekistan has significantly expanded its activities on the bond market. According to Avesta Investment Group, issues doubled from 21.3 trillion soums in 2023 to 42.2 trillion soums in 2025. Tashkent is increasingly using local currency loans to finance the growing budget deficit. This reduces dependence on foreign debt, while at the same time creating a domestic yield curve. Government bonds dominate the market The development is closely linked to monetary policy. The central bank raised the key interest rate to 17% in 2022, lowered it to 13.5% in 2023/24 and raised it again to 14% in 2025. These steps influenced bond prices, yields and investor behavior. By 2025, the bond market had grown to around 6 to 7 percent of GDP, compared to less than 3 percent in 2022. Government bonds remain the most important instrument. However, demand comes mainly from domestic banks, which stabilizes the primary market but limits the investor base. Yields on short and medium-term government bonds fell to around 11.5% to 13% in 2025/26. Longer-term securities, on the other hand, continue to yield around 16.5 to 18.5 percent, as investors price in maturity and inflation risks. The country's external position also improved. International reserves rose from USD 34 billion at the end of 2023 to around USD 66 billion in 2025. S&P and Fitch upgraded Uzbekistan to "BB" with a stable outlook, while Moody's maintained its rating at "Ba3" with a positive outlook. In February, Uzbekistan placed international government bonds worth 1.5 billion US dollars. The order book reached 4.2 billion US dollars. The issue comprised dollar, euro and sum bonds. Part of the euro tranche was structured as a green bond for environmental projects. Corporate bonds catch up Corporate bonds are also growing, albeit from a low level. The outstanding volume reached 5.28 trillion soums in February, more than double that of the previous year. Microfinance institutions were particularly active. Despite the growth, weaknesses remain. Liquidity on the secondary market is limited and the investor base remains concentrated. Further reforms should create new trading platforms and expand access for investors. If these measures take effect, Uzbekistan could deepen its capital markets and offer companies a stronger alternative to bank financing. The post Uzbekistan doubles bond issues appeared first on ostwirtschaft.de.