Uzbekistan Doubles Bond Issuances

Uzbekistan has significantly expanded its activities in the bond market. According to Avesta Investment Group, bond issuance doubled from 21.3 trillion sum in 2023 to 42.2 trillion sum in 2025.

Tashkent is increasingly using local-currency loans to finance the growing budget deficit. This reduces dependence on foreign debt while simultaneously creating a domestic yield curve.

Government bonds dominate the market

This development is closely linked to monetary policy. The central bank raised the key interest rate to 17 percent in 2022, lowered it to 13.5 percent in 2023/24, and raised it again to 14 percent 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, up from less than 3 percent in 2022. Government bonds remain the most important instrument. However, demand comes primarily from domestic banks, which stabilizes the primary market but limits the investor base.

Yields on short- and medium-term government bonds fell to about 11.5 to 13 percent 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 $34 billion at the end of 2023 to around $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. The order book reached $4.2 billion. The issuance included dollar, euro, and sum-denominated bonds. A portion of the euro tranche was structured as a green bond for environmental projects.

Corporate bonds are catching up

Corporate bonds are also growing, albeit from a low base. The outstanding volume reached 5.28 trillion sum in February, more than doubling from the previous year. Microfinance institutions were particularly active.

Despite the growth, weaknesses remain. Liquidity in the secondary market is limited, and the investor base remains concentrated. Further reforms are intended to 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.