Uzbekistan refuses to compete with Russia in foreign gold markets

Uzbekistan does not intend to replace Russian gold in foreign markets, Deputy Minister of Investment and Foreign Trade of the country Shukhrat Vafayev told RBC. In 2021 Uzbekistan and RUSSIAwere among the world leaders in the EXPORT of precious metals

Uzbekistan does not plan to compete with Russia in the external gold markets. Shukhrat Vafaev, Deputy Minister of Investments and Foreign Trade of the Republic, spoke about this, answering a question from RBC. Because of the sanctions, Russian gold mining companies faced problems in selling their products, RBC wrote.

“The gold market is quite specific, and we produce much more than we sell. The gold that is produced in Uzbekistan today is fully redeemed by the Central Bank [of Uzbekistan] and is part of the gold and foreign exchange reserves. <...> That is, there is no such thing as [there being] marketing and [we] purposefully trying to occupy some niche in the large gold market,” Vafaev said.

Uzbekistan produces about 100 tons of gold per year. At the same time, the Central Bank of the country was given a priority right to purchase all local refined gold. Gold accounts for about 60% of the international reserves of the local Central Bank.

According to UN statistics, in 2021 Uzbekistan sold $4.1 billion worth of gold abroad. This precious metal accounted for 29% of the country's total exports, Fitch reported. Since February 2022, the republic has significantly increased the share of gold in the export structure. From January to March, Uzbekistan sold gold worth $2.9 billion abroad, mainly to non-CIS countries. Sales of the precious metal during this period accounted for 52% of total exports, SNG.Today reported with reference to the press service of the State Statistics Committee of Uzbekistan.

According to the Observatory of Economic Complexity (OEC), in 2020, almost 92% of Uzbekistan’s gold exports went to the UK, where the largest international trading hub for this precious metal operates, and 7% ($483 million) of gold was sold to Russia.

Uzbekistan, along with Russia, is among the top ten gold exporters, and in some months the republic becomes the largest seller. This happened, for example, in February 2022, according to the data of the World Gold Council.

In Russia, the growth of gold export abroad began in 2019. Russia sold $17.4 billion worth of gold last year, RBC wrote. Of these, 89% ($15.4 billion) went to the UK. However, the largest gold miners sold the precious metal through Russian banks, which, after the start of a special operation in Ukraine in late February-March 2022, were under sanctions. In particular, Petropavlovsk, one of the top 5 Russian gold producers, had a problem with the sale of products. A company registered in the UK sold gold to Gazprombank, which fell under British sanctions .

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