Dependence of Uzbekistan's Gold and Foreign Exchange Reserves Growth on the Price Factor: Analysis and Forecast

Shokhrukh Fazliddinov^1,*

¹Associate Professor at Turin Polytechnic University in Tashkent (PhD), Uzbekistan

Abstract

This article tried to determine how much of the sharp increase in Uzbekistan's gold and foreign currency reserves in 2019-2025 is related to the increase in gold prices, and how much to the actual changes in reserves. For this purpose, methods of economic analysis and statistical approaches were used. The study was based solely on open data published by the Central Bank of Uzbekistan, the International Monetary Fund, and the World Gold Council. In order to assess this relationship, a logarithmic regression model was developed We calculated the elasticity of Uzbekistan’s value of reserves respect to gold prices and found that a 1% increase in the gold price typically leads to a 0.66% rise in the total official reserves. In other words, the reserves are moderately sensitive (or “semi-elastic”) to gold price movements. In simpler terms, of the impressive reserve growth seen from 2019 to 2025, roughly two-thirds (66%) came simply from higher gold prices while the remaining one-third (34%) was driven by actual increases in the physical amount of gold and foreign currency held, as well as by currency policy decisions. According to forecast scenarios for 2026-2027, reserves will increase to $64 billion if the gold price rises to $4,600, and will decrease to $51.8 billion if the price falls to $3,200. Based on these results, it is recommended for Uzbekistan to transition from a price-driven policy to a reserve management system based on asset volume, maintain the gold share around 50-55%, and implement a "Reserve Sensitivity Dashboard" system.

Keywords: Uzbekistan; Gold and foreign exchange reserves; Price factor; elasticity; Sensitivity index; Econometric model; Macroeconomic stability; Forecast; Diversification