Non-residents and individuals allowed to buy government bonds

The corresponding resolution was issued by the Cabinet of Ministers on February 21. The document regulating the issue and circulation of Uzbek government bonds is being amended.

In particular, all residents of Uzbekistan, both legal entities and individuals, as well as non-residents, received the right to purchase sovereign bonds at primary auctions. Prior to that, non-residents and resident individuals could not buy them.

The volume of liabilities placed for purchase by non-residents will be determined by the Ministry of Finance and the Central Bank. Accounting for the results of auctions will be carried out on the basis of T+0, T+1, T+2 settlement modes. 

Interest on sovereign bonds will be paid every 6 months, in accordance with international standards. The formulas of the International Association of Capital Markets will be used to calculate interest.

In addition, the Ministry of Finance will consider measures to increase the issuance of government securities and develop their secondary market. This will help diversify the public debt portfolio and reduce the level of currency risks.

The first auction for the placement of government bonds took place on December 26, 2018. Since then, the Ministry of Finance has held 104 auctions and placed securities worth 12.042 trillion soums. In 2021, 64 auctions were held, during which bonds for 4.86 trillion soums were placed.

It has been planned for several years to allow the purchase of government bonds for non-residents and citizens. Deputy head of the Central Bank Ilkhom Norkulov promised in 2019 to open the market for them “as soon as it starts to function normally”. 

In particular, they planned to allow foreigners to this market in 2019. In October 2021, President Shavkat Mirziyoyev approved the issuance of inflation-linked government bonds — they are able to protect the investor from price increases and receive a guaranteed income.