The results of the activities of the Uzbek Republican Currency Exchange in 2022 are summed up
Tashkent, Uzbekistan (UzDaily.com) -- The Joint Stock Company Uzbek Republican Currency Exchange (UzRCE) is a high-tech exchange platform that provides all types of exchange services.
The UZRCE organizes trading in foreign currency, government securities, conducts money market and derivatives market operations, and provides pre-trading and post-trading services, including depositary services for accounting and storage of government securities, settlements and clearing for exchange transactions.
At the end of 2022, the total volume of trading in the markets of the UzRCE reached a record level - 706.79 trillion soums, which is 81.60% more compared to the corresponding indicator of the previous year.
UzRCE has organized spot and swap transactions in the US dollar, euro, Russian ruble and Chinese yuan. Bidding is carried out on the modern Rhombus platform, developed by UzRCE specialists, using modern methods of "call-auction" and bilateral continuous auction.
At the end of 2022, the total trading volume on the exchange currency market amounted to 338.34 trillion soums, which is 1.5 times higher than the same indicator of the previous year.
On the interbank money market, through a special electronic platform UzRCE, auctions are held to attract and place free funds of commercial banks for a period of 1 day to a year, as well as deposit auctions of the Central Bank with commercial banks.
Trading on this market provides an additional opportunity for market participants to promptly raise and place funds in short-term assets. The positive dynamics of volumes in recent years testify to the attractiveness of money market instruments.
In 2022, total sales in the money market hit a record high of RUB 270.61 trillion soums, an increase of almost 93% compared to last year.
Government securities market
In this UZRCE market, through the trading and depository platform, trades are conducted for the initial placement and secondary circulation of treasury bills and bonds of the Ministry of Finance of the Republic of Uzbekistan, bonds of the Central Bank, as well as REPO operations.
In 2022, the total sales in this market amounted to 97.8 trillion soums (primary trading - 87.3 trillion soums, secondary trading - 10.0 trillion soums and repo transactions - 0.5 trillion soums) and increased by 3.5 times compared to the corresponding indicator of 2021.
During 2022, for the first time, the following types of government securities issued by the Ministry of Finance were placed on the UzRCE platform:
- long-term government bonds in the amount of 10 billion soums with a maturity of 10 years. This tool will allow creating a "benchmark" in the market, and will also help expand the investor base by attracting insurance companies and pension funds;
- inflation-linked government securities with a maturity of 5 years in the amount of 106.3 billion soums. This investment vehicle is considered a hedge against inflation-related losses, allowing investors to hedge against inflationary risks;
- government securities for targeted financing of infrastructure development in the amount of 149.7 billion soums with a maturity of 5 years. These securities make it possible to cover the budget deficit to finance infrastructure projects and raise long-term funds. This increases the attractiveness of government securities for institutional investors, namely pension funds and insurance companies.
In addition, for the convenience of trading participants in the government securities market, a mobile application of the UZRCE "UZCE mobile GB" was launched. This application allows you to remotely trade government securities, as well as receive the necessary exchange information. The application is available in the electronic stores "Play market" and "App Store".
From 3 October 2022, for the first time in Uzbekistan, trading in currency futures contracts has been launched on the UzRCE derivatives market, on the Rhombus derivatives platform, developed by UzRCE specialists.
A currency futures contract is an agreement to sell or buy a specified amount of a currency on a specified date in the future at an agreed price on the day the contract is entered into.
Trading in futures contracts is carried out by the method of a bilateral continuous auction, and the exchange rate of the US dollar against the soum is set as their underlying asset.
The new instrument offered to market participants makes it possible not only to reduce external and internal risks associated with exchange rate fluctuations, but also to receive income from exchange rate changes and introduce new derivative instruments.
UzRCE cooperates with a number of leading and advanced foreign and domestic exchanges and financial organizations.
To date, UzRCE has signed Memorandums of Cooperation with the Moscow Exchange, the Kazakhstan Stock Exchange, the Belarusian Currency and Stock Exchange, Refinitiv (Thomson Reuters).
Within the framework of the memorandums, ongoing cooperation is carried out on the further development of the exchange market, the introduction of new instruments, the attraction of foreign investors to the local capital market, staff development and other areas.
Plans for 2023
In the near future, it is planned to introduce an interest rate swap instrument in the UzRCE currency swap market, bring trading processes in line with international standards, and introduce the activities of a market maker in this market.
For government securities:
- making settlements in the T+2 mode based on the results of transactions concluded on the secondary market for government securities, thereby creating conditions for participation in trades without prior deposit of funds;
- implementation of the activities of a central counterparty in the government securities market, including the creation of a risk and default management system and the implementation of the activities of a liquidity provider;
- development of the "REPO Basket" and the new UZRCE REPO trading platform;
- creation of a guarantee fund of the UzRCE and a reserve fund by bidders and the creation of mechanisms for its use in the government bond market;
In addition, it is planned to broadcast exchange information (market date) to external users on a paid basis through external providers.
In order to create conditions for direct access of foreign investors to the UzRCE government securities market and ensure settlements based on the results of transactions concluded by them, certain work is being carried out to connect to the international interbank system for transmitting information and making payments - SWIFT.
In the derivatives market, it is also planned to introduce futures contracts for the value of government securities, as well as for various other indicators and stock market indices.
Work also continues on the creation of a "Clearing Center" at the UzRCE, whose functions include the implementation of settlements on transactions concluded on the markets of the UzRCE.