TASHKENT

The Asian Development Bank (ADB) has approved a $100 million policy-based loan to support policy, regulatory, and institutional reforms needed to create an enabling environment for competitive financial markets in Uzbekistan.

“As Uzbekistan accelerates its transition toward a market economy, robust and competitive domestic financial markets are essential for mobilising private investment,” Yevgeniy Zhukov, ADB Director General for Central and West Asia, said in a statement.

“ADB will help develop financial markets in Uzbekistan and stimulate private investment—a key driver of economic growth and an important source of new jobs in the country.”

The ADB’s Financial Markets Development Programme will support reform measures to deepen and broaden Uzbekistan’s financial markets. It seeks to promote a more liquid government bond market and diversify the investor base. The programme will also help develop critical market infrastructure, including surveillance systems and enhance the supply of alternative financial instruments such as exchange-traded funds.

“The programme will help reduce systemic vulnerabilities in Uzbekistan’s financial system through diversification away from a predominantly bank-based system of financial intermediation. It will promote the development of the corporate securities market, enhance demand from institutional investors such as insurance companies, diversify the financial instruments available, and broaden the investor base,” said Syed Ali-Mumtaz H. Shah, ADB Principal Financial Sector Specialist. “By strengthening the governance of the financial markets, the programme will enhance market efficiency and improve investor protection.”

“The programme will play an important role in enabling investors to gain access to alternative investment opportunities and helping raise funds cost-effectively,” added ADB Principal Public Management Economist Çiğdem Akın. “This will help Uzbekistan diversify its financial system and advance toward its socio-economic development objectives.”

The ADB will provide a $500,000 technical assistance grant to support key reform actions under the programme.

Uzbekistan joined the ADB in 1995. Since then, the bank has committed loans, grants, and technical assistance amounting to $10.1 billion for the country.