Baku, Azerbaijan, Sept. 14
By Fakhri Vakilov-Trend:
Uzbekistan will open the domestic market for government securities for its citizens and non-residents, said the Agency for Development of the Capital Market of Uzbekistan, Trend reports citing IA Kun.uz
The government instructed the Ministry of Finance, the Central Bank and the agency to “put in order” the Regulation on the procedure for placement, circulation and redemption of issues of government securities and to allow non-residents and individuals to acquire them, read the message.
At the end of 2018, the Ministry of Finance, together with the Central Bank, resumed operations with government securities after a long break, but according to law only resident legal entities in Uzbekistan could buy them.
The disadvantage of this situation is that the circle of customers is limited. As a result, there is no secondary market and real market price for these securities. In case of expanding the circle for greater liquidity, the price of securities can become an indicator for the capital market, read the message.
Government bonds around the world are considered zero risk securities. The probability that the state will not be able to fulfill obligations on securities is practically zero. The state must default for this to happen, read the message.
Uzbekistan had concerns with foreign investors about capital controls so the regulatory process should be more transparent, read the message.
Follow author on Twitter:@vakilovfaxri