Tashkent, Uzbekistan (UzDaily.com) -- Total trading volume of the Uzbek Currency Exchange (UzRSE) reached 163.10 trillion soums in January-February 2023, which grew by 5.42% year-on-year. This was reported by press service of Uzbek Currency Exchange.

Since the beginning of 2023, the total volume of trade in the currency market amounted to 74.53 trillion soums, which rose by 94.78% (38.26 trillion soums) compared to the same period of last year. At the same time, the currency market’s share of transactions made up 45.69% of the total trading volume, which enabled this market to take a leading position.

Money market

The money market of the UzRSE is represented by inter-bank deposit market, where deals are concluded on placement/attraction of money for the period from 1 day till 1 year, as well as deposit auctions of the Central Bank on attraction of free money of commercial banks.

In January-February 2023, total volume of trades in money market made up 74.31 trillion soums (48.19 trillion soums - inter-bank money market and 26.12 trillion soums - deposit auctions of the Central Bank) and exceeded 2.5 times (28.67 trillion soums) compared to last year.

The specific weight of deals in the money market made up 45.56% of the total trading volume.

The deals totaling 48.19 trillion soums were made in interbank money market. The market was dominated by deals on allocation / attraction of funds for one day (overnight) with specific weight of 69.78% or 33.62 trillion soums. Up toone-weekk deposits accounted for 25.46% of the total market volume or 12.27 trillion soums. The total volume of the remaining transactions was 2.30 trillion soums or 4.77% of the total volume.

The volume of transactions concluded in the Central Bank’s deposit auctions during the same period amounted to 26.12 trillion soums with a yield close to the Central Bank’s key rate.

Debt Market

Government securities (GS) - bonds and liabilities of the Ministry of Finance, as well as bonds of the Central Bank - are traded in the UzRSE debt market.

It should be noted that from 1 February market-makers’ activity was introduced at this market. ASIA ALLIANCE BANK JSCB, Uzpromstroybank JSCB, Ipak Yuli JSCB, Turonbank JSCB as well as Khalk Bank JSCB received corresponding status. According to the approved Program, the market-makers undertake to provide liquidity to the secondary market of GS by forming bid-ask quotes.

The program includes three types of status MM-GB STANDARD, MM-GB MEDIUM and MM-GB PREMIUM. At that, the higher the status of the market-maker, the more liabilities he has in terms of volume of passive transactions and the minimum number of GS issues, for which he announces and maintains bilateral quotations, as well as narrow spread corridor (0.3%, 0.28% and 0.26%, respectively).

In addition, from 14 February 2023, UzRSE has started to place government bonds in T+2 settlement mode.

This method implies making final settlements for the government securities purchased at the auction on the second trading day after the transaction date (no prior deposit of funds for transactions is required), which allows traders to manage their cash assets efficiently and rationally.

In the reporting period, 12.95 trillion soums worth of government securities were placed in the primary market of government securities, or slightly higher than in 2022 (11.16 trillion soums).

According to results of primary auctions in January - February 2023, weighted average yield on short-term government securities (with circulation period of up to one year) ranged from 16.40% to 17.51%.

In the secondary market, during the reporting period, the deals for the amount of 0.83 trillion soums or 0.47 trillion soums less than the same indicator of the last year (1.30 trillion soums) have been concluded.

Also, in the period under review REPO transactions were concluded for the amount of 489.8 billion soums. For comparison, in the same period of 2022, this figure amounted to 2.0 billion soums.

In general, total trading volume in GS market in the reporting period made 14.27 trillion soums, or 14.51% more than the value of the same indicator in 2022 (12.46 trillion soums).

As of 28.02.2023, volume of GS, kept in depository registers of UzRSE at a nominal value increased by 50.80% as compared with same indicator of the last year and made up UZS 26,982.17 billion.

Derivatives Market

The derivatives market is organised to trade settled futures contracts, in which the difference between the spot rate on the date of the transaction and the rate on the last day of the transaction is paid out. Futures contracts are traded on the Rhombus derivatives trading platform by means of a two-way continuous auction (metering).

In order to increase the volume of transactions on currency futures contracts and ensure liquidity in the market, market makers were introduced, and the status of market maker was assigned to JSCB Kapitalbank and AIKB Ipak Yuli. Also, the respective market-maker programmes defined the obligations and the procedure for remuneration of market-makers.

Today, the market-makers ensure the availability of orders in the trade system both on the purchase and sale sides within the spread values set by the UzRSE market-maker programs.

Besides, within the framework of measures aimed at introduction of efficient default management system at UzRSE, UzRSE has established a guarantee fund at its own expense to ensure fulfilment of obligations in case of default, i.e. in case of untimely fulfilment of obligations under concluded deals.

In total, 500 currency futures contracts worth US$0.5 million with expiration date of 23 February 2023 have been concluded in the market in January-February 2023.

UzRSE is the country’s largest and multifunctional exchange platform - an organiser of exchange trading in the foreign exchange, money, futures and government bond markets, with a unique integrated system including trading floors, a settlement and clearing system and a depository.