Bonds in Uzbekistan

The corporate bond market in Uzbekistan began to form in August 2001. Between 1999 and 2001, individual companies and banks started issuing corporate bonds (CBs) as an alternative way to raise funds. The total volume of these early issuances was around 600 million UZS (about $900,000). These bonds were mostly short-term and didn’t gain much market traction.

The first corporate bond was issued by TS Technology, a computer assembly company. On June 29, 1999, it issued 70 million UZS worth of bonds, marking the start of Uzbekistan’s corporate bond history.

Since 2017, Uzbekistan has taken steps to reform corporate bond regulations. A major milestone came in 2020, when the first non-bank bond issue without collateral was successfully completed.

A key reform was allowing limited liability companies (LLCs) to issue corporate bonds, a right previously limited to joint-stock companies. This change was implemented through Order No. 2000-8 on November 6, 2020, by the Agency for the Development of the Capital Market.

Also in 2020, the Central Bank allowed microfinance organizations to issue bonds to increase their funding options. On top of that, the government introduced tax incentives on income from bond coupons, making the market more attractive.

In 2018, the Central Bank issued Resolution N30/15 on September 22, which canceled previous rules on bond issuance and circulation. This marked a turning point in the development of Uzbekistan’s government securities market.

Now, government bonds are issued not only by the Central Bank, but also by the Ministry of Economy and Finance (MEF).

To support market growth and build a full yield curve, Uzbekistan launched its first inflation-linked bonds on July 19, 2022, and later introduced ten-year bonds on January 25, 2022.

Originally, only banks and legal entities could buy government securities. But in February 2022, a Cabinet resolution allowed all investors, including individuals, to join primary auctions.

Banks remain the main traders of government securities. This is largely because the Central Bank gives these bonds favorable treatment—counting them with a 100% liquidity ratio and 0% risk ratio. The CBU also runs regular REPO operations on these securities without applying a discount to their value. This lets banks invest nearly all their funds into government bonds.

A big step for further market expansion is the approval of a "regulatory sandbox". This allows foreign banks and brokers to access the market more easily. In February 2024, the Bank of Georgia became the first participant. Acting as a custodian bank for international investment banks and Clearstream, it opened the door for global investors to buy Uzbek government securities directly.