Gold price drop could significantly impact Kyrgyzstan’s reserves, Fitch

Kyrgyzstan and Uzbekistan face potential risks due to their heavy reliance on gold for international reserves, according to a report by Fitch Ratings. At the end of the first half of 2026, gold accounted for 87 percent of Uzbekistan's international reserves and 80 percent of Kyrgyzstan's, the highest shares globally for Uzbekistan. This concentration creates vulnerability to sharp fluctuations in precious metal prices, despite potentially reflecting efforts to build buffers against external shocks.

Fitch analysts noted that a significant fall in gold prices could notably impact both countries. However, they stressed that such a scenario is unlikely, by itself, to trigger negative rating actions for either Kyrgyzstan or Uzbekistan. As of May 15, 2026, Kyrgyzstan's gross international reserves stood at $9.082 billion.

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In Uzbekistan, gold accounted for 87 percent of international reserves at the end of June 2026, the highest share in the world. In Kyrgyzstan, the figure was 80 percent. While the growing concentration may reflect policy efforts to build buffers against external shocks, it may also create vulnerability to sharp changes in gold prices, particularly given continued volatility.

The report also highlighted that rising gold prices have generally benefited the external balances of gold-producing nations in the region. Uzbekistan's current account deficit narrowed from 7.3 percent of GDP in 2023 to 3.9 percent in 2025, partly driven by a 20 percent increase in the value of its gold exports. In contrast, Kyrgyzstan's gold exports doubled in 2024 but saw a significant decline in 2025, with only 190.8 kilograms sold in the first six months of that year.

Overall, reserve coverage of current external payments has increased by an average of 50 percent across the region over two years. Central Asia has seen the highest average annual growth rate in global gold production, at 4.7 percent between 2011 and 2025, compared to a global average of 2 percent.

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A scenario in which gold prices fall significantly could have a notable impact on Kyrgyzstan and Uzbekistan. However, this is unlikely, by itself, to result in negative rating action for either country.