GLOBAL MONETARY AFFAIRS | FEATURE ANALYSIS
February 2026
In a single month at the start of 2026, the Central Bank of Uzbekistan added nearly $9 billion to its international reserves — a rise from $66.3 billion to approximately $75 billion. With gold accounting for 85% of that total, the episode is not merely a Central Asian footnote. It is a mirror held up to the deepest and most unresolved questions in modern monetary economics: What is money? What constitutes national wealth? Are the standards by which the IMF and the international community measure ‘adequate’ reserves still fit for purpose? And what does a country on the other side of the Silk Road have to teach Singapore, one of the world’s most sophisticated reserve managers?
I. The Anatomy of a $9 Billion Month
The numbers demand explanation. Between 1 January and 1 February 2026, Uzbekistan’s international reserves grew by approximately $8.7 billion. No balance-of-payments surge, no foreign direct investment bonanza, no sovereign debt issuance is reported to explain it. The answer lies almost entirely in the price of gold.
Spot gold prices rose sharply in January 2026, continuing a multi-year bull run that has seen the metal advance from under $2,000 per troy ounce in 2023 to levels well above $2,600 at various points in 2025 and early 2026. Since Uzbekistan holds approximately 380.4 tonnes of gold — and since 85% of its reserves are denominated in that metal — a move of even $300 per ounce in the gold price translates into roughly $3.7 billion in reserve valuation. A more sustained rally easily produces the $8.7 billion gain recorded.
This is not a trivial technicality. It goes to the heart of what international reserves are, what they measure, and why the gap between a country’s stated reserve level and its liquid, deployable firepower can be profound.
“When gold moves, Uzbekistan moves. That is the double-edged nature of a reserve strategy built on the world’s oldest store of value.”
Unlike foreign exchange holdings denominated in US dollars, euros, or yen, gold does not earn interest. It does not represent a claim on a foreign central bank or treasury. It is a physical commodity whose value is determined by the intersection of global sentiment, dollar strength, real interest rates, and the collective anxiety of investors worldwide. When those forces align favourably — as they have in recent years amid geopolitical fragmentation and dollar weaponisation concerns — gold-heavy reserve portfolios balloon. When they do not, the reverse occurs with equal force.
II. What Is Money? The Question Uzbekistan Forces Us to Ask
The conventional modern definition of money rests on three functions: a medium of exchange, a unit of account, and a store of value. Gold, in the context of international reserves, performs only one of these functions reliably — and even that is contested.
Gold is not a medium of exchange in contemporary international trade. No central bank settles balance-of-payments obligations in gold bullion. The Bretton Woods system, which linked the US dollar to gold at $35 per ounce, collapsed in 1971 when President Nixon suspended dollar convertibility. Since then, the international monetary system has operated on fiat foundations: currencies backed not by metal but by sovereign authority, institutional credibility, and economic output.
Nor is gold straightforwardly a unit of account. Reserve adequacy, import coverage, and debt-service ratios are all calculated in US dollars. When the IMF assesses Uzbekistan’s reserve position and concludes it covers 17 months of imports, that assessment implicitly assumes that gold reserves can be monetised — sold into the market — at prevailing prices without materially moving those prices. For a country of Uzbekistan’s scale, this is broadly plausible. For larger holders, the assumption frays considerably.
Gold’s credible claim is as a store of value across long time horizons — and here the historical record is genuinely impressive. Gold has preserved purchasing power over centuries in ways that paper currencies have not. The Roman aureus, the Venetian ducat, the British sovereign: across different civilisations and monetary regimes, gold has retained a residual claim on real resources that fiat money lacks almost by definition, since fiat money’s value is structurally dependent on the policies of the issuing sovereign.
The Post-2022 Context
To understand why a country like Uzbekistan — or indeed Russia, China, India, and Turkey, all of which have been accumulating gold — maintains such high gold allocations, one must understand what happened in February 2022. When Western powers froze approximately $300 billion of Russia’s foreign exchange reserves held in foreign custodians following the invasion of Ukraine, a seismic signal reverberated through every non-Western central bank: dollar and euro-denominated reserves held abroad are not unconditionally available. They are subject to the political will of the issuing jurisdiction.
Uzbekistan’s response — as articulated by Kamol Alimuhammedov of its Central Bank’s International Reserves Management Department — is instructive: all gold is held domestically, in the vaults of the Central Bank in Tashkent. No foreign custodian. No counterparty risk. No credit risk from overseas storage. This is not naïve; it is a rational response to a world in which the weaponisation of the dollar payment system has become an established instrument of statecraft.
“The 2022 Russian reserve freeze changed the calculus for every central bank outside the Western alliance. Gold in your own vault cannot be frozen.”
What Uzbekistan’s approach implicitly asserts is that in a world of geopolitical rupture, the monetary properties of an asset — its liquidity, its legal security, its finality — cannot be separated from its political and jurisdictional properties. A US Treasury bill is liquid and safe in normal times. In extreme times, its availability is conditional on the depositor’s political relationship with Washington. Gold held domestically is always available, at the cost of being illiquid in the short run.
III. Redefining Wealth: What Reserve Composition Reveals
National wealth, in the macroeconomic sense, encompasses a country’s stock of productive assets: human capital, physical infrastructure, natural resources, and financial claims on other economies. International reserves are the liquid subset of the financial component — the portion held in easily tradeable foreign assets that can be deployed rapidly to defend the exchange rate, service foreign debt, or smooth a balance-of-payments shock.
But this standard framework increasingly struggles to accommodate the reality of countries like Uzbekistan, where natural resource wealth is the primary driver of both economic output and reserve accumulation. Uzbekistan is among the world’s top ten gold producers. Its domestic legislation grants the Central Bank priority rights to purchase all domestically refined gold. The country’s reserve wealth and its productive wealth are therefore deeply intertwined: the gold in the vault is not just a financial asset; it is the crystallised output of an extractive industry that employs thousands and underpins significant portions of export revenues.
The Sterilisation Challenge
This integration of productive and reserve wealth creates a distinctively complex monetary management problem. When the Central Bank purchases domestically produced gold, it issues local currency — Uzbekistani sums — into the domestic economy. This injection of liquidity, if unaddressed, feeds inflation. The Bank’s response is a textbook sterilisation operation: it sells foreign exchange on the local market to mop up the excess sums, thereby neutralising the monetary impact of its gold purchases without explicitly targeting the exchange rate level.
The sophistication of this mechanism should not be underappreciated. Many resource-rich developing economies have struggled precisely with this problem — the so-called ‘resource curse’ in its monetary manifestation, where commodity export revenues overwhelm the domestic banking system’s capacity for sterilisation, generating inflation, exchange rate appreciation, and de-industrialisation. Uzbekistan’s framework represents a deliberate attempt to manage this tension, though the scale of the challenge grows as reserves increase.
Diversification as Signal
The Central Bank’s 2024 entry into US Treasury securities — building a portfolio of approximately $1.5 billion in short-term instruments — is diagnostically important precisely because of its small size relative to total reserves. At roughly 2% of total holdings, it is not a meaningful liquidity buffer in absolute terms. Its significance is structural and signalling: it represents the first step of a reserve manager that has absorbed international best practice through the World Bank’s RAMP programme and is beginning to implement a more conventional diversified allocation.
Table 1: Uzbekistan Reserve Composition vs. Reserve Adequacy Benchmarks
Metric IMF Threshold Uzbekistan (Feb 2026) Assessment
Import coverage 3 months 17 months Exceptional
Short-term debt coverage 100% 440% Exceptional
IMF ARA Metric 1.0× 3.4× Exceptional
Gold share of reserves ~10–15% typical 85% Highly concentrated
Forex diversification Multiple currencies 16 countries, 35 banks Adequate
US Treasuries allocation Varies ~$1.5bn (~2%) Early-stage
IV. Reserve Standards Under Strain: The IMF Framework in a Multipolar World
The IMF’s reserve adequacy framework was constructed for a world of integrated capital markets, broadly convertible currencies, and cooperative multilateral institutions. Its principal metrics — import coverage, short-term debt coverage, and the composite ARA measure — reflect the primary purposes of reserves in that world: to buffer current account shocks, to service maturing obligations, and to smooth exchange rate volatility during episodes of capital flow reversal.
Uzbekistan passes all of these tests with considerable margin. At 3.4 times the ARA threshold, its reserve adequacy is not in question by conventional measures. But the composition of those reserves — 85% in gold — raises a question the IMF framework does not cleanly answer: Is 3.4 times the ARA threshold in gold equivalent to 3.4 times the threshold in liquid foreign exchange?
The Liquidity Hierarchy
International reserve practitioners distinguish between different tiers of liquidity. At the apex sit overnight deposits at major central banks and very short-term government paper in reserve currencies — assets that can be converted to dollars within hours without meaningful market impact. Below them sit longer-dated sovereign bonds, agency paper, and high-grade corporate debt. Gold sits in a category of its own: deeply liquid in normal market conditions (the London Bullion Market Association reports daily turnover in the hundreds of billions of dollars), but subject to bid-ask spreads that widen dramatically in a genuine financial crisis, precisely when liquidity is most needed.
The 2008 global financial crisis illustrated this vividly. While gold prices ultimately rose during the episode, the initial shock phase in September and October 2008 saw gold sold aggressively by leveraged investors seeking to meet margin calls, briefly suppressing its price just as systemic stress was peaking. A central bank seeking to mobilise gold reserves at that moment would have done so at unfavourable prices.
ARA Methodology and Its Limitations
The IMF’s ARA metric is a composite measure that weights different potential reserve drains: export revenues (a proxy for current account needs), broad money (a proxy for resident capital flight risk), short-term debt (rollover risk), and other portfolio liabilities. It does not, however, apply a haircut to gold based on its liquidity profile relative to foreign exchange. A dollar of gold reserves counts the same as a dollar of US Treasuries in the calculation. This is a significant methodological gap, and one that becomes more pronounced as more countries — particularly those outside the Western alliance — accumulate gold.
“The IMF’s reserve adequacy framework gives equal weight to a dollar in a New York bank account and a dollar of gold in a Tashkent vault. In a crisis, these are not the same thing.”
A more rigorous framework would apply liquidity-adjusted adequacy ratios, discounting gold at perhaps 20–30% in the adequacy calculation to reflect its higher transaction costs and price volatility. Under such an approach, Uzbekistan’s effective reserve adequacy — while still well above thresholds — would look meaningfully different. The ARA score of 3.4× would reduce to perhaps 2.2–2.5× on a liquidity-adjusted basis, still adequate by international standards but less comfortably exceptional.
Table 2: Top Global Gold Reserve Holders (World Gold Council, 2026)
Country Gold Holdings (Tonnes) Global Rank Approx. % of Reserves
United States 8,133.5 1st ~65–70%
Germany 3,350.3 2nd ~65%
Italy 2,451.9 3rd ~65%
France 2,437.0 4th ~60%
Russia 2,326.5 5th ~25%
Uzbekistan 380.4 17th ~85%
V. The Singapore Dimension: A Study in Contrasts
Few comparisons illuminate Uzbekistan’s reserve strategy more sharply than Singapore’s. Both are small, open economies with very high reserves relative to GDP. Both are non-Western in the sense of being outside the G7 institutional framework. Both take reserve management seriously as a matter of national strategic priority. And yet their approaches could hardly be more different.
Singapore’s Reserve Architecture
Singapore manages its reserves through a tripartite structure. The Monetary Authority of Singapore (MAS) holds official foreign reserves — primarily used for exchange rate management under Singapore’s distinctive currency-basket, managed-float regime. The Government of Singapore Investment Corporation (GIC) manages the government’s fiscal reserves with a multi-decade investment horizon. Temasek Holdings manages the government’s equity stakes in state-linked enterprises. Together, this architecture represents one of the most sophisticated sovereign wealth management ecosystems in the world.
Singapore’s reserve strategy is almost the antithesis of Uzbekistan’s. It is diversified across asset classes, geographies, and currencies. It is invested substantially in equities, real assets, and private markets alongside fixed income. It earns real returns. Singapore’s gold holdings are minimal — the MAS holds a small position, but gold does not feature as a strategic component of the reserve framework. The emphasis is on liquidity, diversification, and risk-adjusted return.
Why the Contrast Matters
The comparison is instructive on multiple dimensions. Singapore’s approach reflects a specific set of circumstances: a highly open capital account, a currency whose stability is the primary monetary policy instrument, membership in the global financial system’s inner circle, and an absence of meaningful political risk from asset freezes by Western powers. These conditions permit — indeed, require — a different reserve strategy. Singapore cannot afford to hold illiquid reserves; the MAS may need to intervene in the foreign exchange market on short notice, and its reserve composition must reflect that operational requirement.
Uzbekistan’s circumstances differ across each dimension. Its capital account is more managed. Its currency, the sum, is not a reserve currency and its convertibility is limited. Its geopolitical positioning — as a Central Asian state with deep economic ties to Russia, China, and the former Soviet bloc — creates a different risk calculation from Singapore’s. Its primary reserve income comes from commodity extraction rather than financial intermediation. And its institutional capacity for sophisticated multi-asset investment management, while growing rapidly through programmes like RAMP, remains at an earlier stage of development than Singapore’s.
Convergent Pressures
Despite these structural differences, both countries face a common challenge: operating in an increasingly fragmented international monetary system where the dollar’s reserve currency dominance is being contested, where sanctions have demonstrated the coercive potential of financial infrastructure, and where the optimal reserve composition is no longer obviously clear.
For Singapore, the key question is whether its deep integration into the dollar-centred financial system — which has been enormously beneficial — creates strategic vulnerabilities in a world of intensifying US-China competition. Singapore has carefully managed its neutrality between these two great powers, but neutrality becomes harder to sustain as financial infrastructure bifurcates. The MAS has been active in developing multilateral cross-border payment systems, including Project Nexus and mBridge, precisely to reduce dependence on SWIFT and dollar correspondent banking. This is reserve management strategy in the broadest sense.
For Uzbekistan, the question runs in the other direction: its gold-heavy strategy provides security from external financial coercion but at the cost of return, diversification, and alignment with evolving international reserve norms. Its $1.5 billion US Treasury allocation signals an aspiration toward integration with dollar-denominated financial markets even as its gold strategy hedges against the risks of that integration.
“Singapore builds reserves that earn returns. Uzbekistan builds reserves that endure geopolitical storms. In a fragmenting world, both instincts are defensible.”
Table 3: Singapore vs. Uzbekistan — Reserve Strategy Comparison
Dimension Singapore Uzbekistan
Reserve manager MAS / GIC / Temasek Central Bank of Uzbekistan
Primary reserve assets Diversified (FX, equities, bonds) Gold (~85%)
Gold allocation Minimal (<5%) ~85%
Storage approach International custodians Fully domestic
Return orientation Multi-asset, return-seeking Safety/liquidity first
Exchange rate regime Managed float (NEER band) Managed/crawling peg
IMF ARA adequacy High 3.4× threshold
Sovereign wealth vehicle GIC / Temasek Not yet established
Key geopolitical risk US-China bifurcation Sanctions / freeze risk
VI. Geopolitics and the New Gold Rush
The broader context for Uzbekistan’s reserve strategy is a global trend that has gone largely unreported in mainstream financial commentary: central bank gold buying has reached levels not seen since the end of the Bretton Woods era. The World Gold Council reports that central banks globally purchased over 1,000 tonnes of gold in both 2022 and 2023, with strong buying continuing into 2024 and 2025. The buyers are overwhelmingly emerging market and developing economy central banks — China, India, Poland, Turkey, Kazakhstan, and others — with the explicit or implicit motivation of reducing dollar dependence.
This trend is not merely a portfolio diversification story. It is a monetary geopolitics story. It reflects a calculation, made independently by dozens of central banks, that the architecture of the post-war international monetary system — in which the United States has both the exorbitant privilege of issuing the global reserve currency and the coercive capacity to exclude actors from the dollar system — is no longer a fixed feature of the international order. They are hedging against a world in which that architecture either fractures or is used against them.
The De-dollarisation Debate
Whether this constitutes genuine de-dollarisation — or merely incremental reserve diversification at the margin — is a subject of genuine analytical debate. The dollar’s share of global foreign exchange reserves has declined from approximately 71% in 2000 to around 58% in recent years, according to IMF COFER data. This is a meaningful shift, but the dollar remains dominant by a very wide margin. No alternative reserve currency — not the euro, not the renminbi, not gold — has emerged to replace it at scale.
The renminbi’s share of global reserves has stagnated at approximately 2–3% despite years of Chinese effort to internationalise its currency, reflecting the barriers that China’s capital controls and institutional opacity impose on foreign reserve managers. Gold, for all its symbolic power, remains operationally cumbersome and non-interest-bearing. The euro suffers from the political fragility of the eurozone project.
What is happening, more precisely, is a diversification at the margins of the global reserve system — a gradual, incomplete shift away from unconditional dollar dependence toward a more multipolar reserve structure. Uzbekistan’s extreme gold weighting represents one end of that spectrum: a maximalist hedge against dollar system participation, bought at real costs in terms of return and liquidity.
VII. Implications for the Future of Reserve Standards
If the trend toward gold accumulation and domestic storage continues — and there is no sign of it abating — the international monetary system will face increasing pressure to update its reserve adequacy frameworks. The IMF’s ARA metric was not designed for a world in which a significant and growing minority of reserve holders maintain 50–85% of their reserves in gold held domestically, outside the dollar correspondent banking system.
Scenario Analysis
Consider three scenarios for how this evolves. In the first scenario — benign convergence — rising institutional capacity in countries like Uzbekistan, combined with sustained economic integration, gradually leads to more conventional reserve diversification. Gold allocations fall toward the 20–30% range typical of European central banks. US Treasury and other high-grade sovereign bond holdings expand. The international reserve system retains its essentially dollar-centred architecture with broader diversification at the margins.
In the second scenario — structured multipolarity — a more explicit bifurcation emerges between dollar-system participants and a looser grouping of countries that maintain larger gold allocations and develop alternative payment and settlement architectures. The IMF framework bifurcates correspondingly, with different adequacy standards applied to countries whose reserves are operationally deployable into the dollar system and those whose reserves are more geopolitically secured but less liquid.
In the third scenario — fragmentation — the international monetary system fractures more decisively, with regional reserve currency blocs emerging around the dollar, the euro, and potentially the renminbi or a BRICS basket instrument. Gold re-emerges as a neutral settlement asset between blocs, echoing its historical role in the classical gold standard era. Countries like Uzbekistan, positioned at the intersection of multiple economic blocs, find themselves in a strategically advantageous reserve position.
The Case for Reformed Adequacy Standards
Regardless of which scenario materialises, there is a compelling case for the IMF and the international reserve management community to develop more nuanced adequacy standards that account for reserve composition — specifically, that distinguish between liquid foreign exchange reserves and gold reserves on the basis of their operational availability, their liquidity under stress, and their sensitivity to geopolitical factors that may simultaneously impair their value and the country’s ability to access conventional financing.
Such a reform need not be punitive toward gold-heavy reserve strategies. It would simply provide more transparent and honest signalling about the nature of a country’s reserve buffer — and would create incentives for gradual diversification of the kind Uzbekistan is already beginning to pursue.
VIII. Conclusions: Old Metal, New Questions
Uzbekistan’s $75 billion reserve stockpile, 85% in gold, is simultaneously an artefact of post-Soviet institutional history, a rational response to geopolitical reality, a reflection of the country’s resource endowment, and a fascinating case study in the contested nature of monetary value in the 21st century.
It forces us to confront questions that polite macroeconomic discourse tends to avoid. What is money, really, in a world where reserve assets can be frozen by political decision? What constitutes genuine national wealth when commodity output and financial reserves are two sides of the same coin? Are the standards by which the international community evaluates reserve adequacy fit for the world as it now exists, or are they calibrated for a Bretton Woods-era architecture that is slowly dissolving?
For Singapore, the lesson is not that it should buy more gold — its circumstances are fundamentally different. But the Uzbek case is a reminder that reserve management is ultimately a geopolitical as much as a financial exercise. The questions it raises about the security of reserve assets in a world of contested financial infrastructure are live questions for Singapore too, even if the optimal answers differ substantially.
For the international monetary system more broadly, Uzbekistan’s trajectory offers a partial preview of a more multipolar reserve world — one in which the primacy of the dollar is no longer taken as given, in which the geography of reserve storage matters as much as its quantity, and in which the definition of monetary safety itself is contested between the custodians of the old order and those seeking to hedge against its decline.
The gold in those Tashkent vaults is more than a commodity. It is a statement about the limits of trust in a fractured world — and a question, addressed to the international monetary community, about whether the frameworks it uses to measure financial security have kept pace with the geopolitical reality it must now navigate.
Sources & Methodology
Primary data: Central Bank of Uzbekistan (February 2026 reserve release); World Gold Council Official Reserve Statistics; IMF COFER Database; IMF Assessing Reserve Adequacy (ARA) Methodology Paper (2015, updated 2022); World Bank RAMP Programme Documentation. Comparative data on Singapore drawn from MAS Annual Reports and publicly available GIC/Temasek disclosures. All dollar figures in USD unless stated. Gold price and valuation changes are author estimates based on prevailing spot prices.