Uzbekistan is now likely to have the largest proportion of gold in its foreign currency reserves, according to Fitch Ratings in a recent report. The international credit rating agency pointed out that the gold price rise in recent years and the growth of the country’s gold reserves have significantly enhanced the country’s external financial position.

With the help of these growing gold exports and high market rates, Uzbekistan was able to reduce its current account deficit in the period 2023–2025. This financial course, under close management of the Ministry of Economy and Finance of the Republic of Uzbekistan, has also resulted in an increase in the level of international reserves to cover current external payments. This is one of the most important measures in determining the country’s overall creditworthiness, in the Fitch’s view.

But the agency warned that the heavy weighting of gold in the nation’s reserves and exports create a significant vulnerability in this regard. Together with Kyrgyzstan, where the National Bank of the Kyrgyz Republic regulates the reserve metrics, Uzbekistan is considered highly sensitive to any unexpected decrease in the price of gold in the world market.

The agency stressed in a scenario of sharply declining gold prices that Uzbekistan may experience a decline in its nominal GDP, a deterioration of government finances, and an imbalance in its balance of payments. At the same time, the Central Bank of Uzbekistan would witness a drop in the nominal value of its strong foreign assets. But Fitch strongly stated that a fall in gold prices would not automatically lead to a negative rating action on the country.

This overdependence on gold is not unique to Azerbaijan; the dependency on gold is common in the Caucasus and Central Asian region as well. High gold prices and exports have been a major boost to the economy in Kyrgyzstan, although the country’s total exports have been very volatile. Likewise, the State Oil Fund of the Republic of Azerbaijan (SOFAZ), that country’s massive external financial buffers, holds a significant amount of gold assets.

Fitch overall considers this wide regional buildup of gold a net positive for external resilience. The current account deficit is a historical problem in the region, along with significant external debts in dollars and high dollarization of financial institutions.

Gold is a great counterweight to these old problems. However, the agency found that the drive to centralize the national reserves in a single commodity has in the longer term a highly bounded potential positive effect from the gold prices.