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Finance

Kyrgyz National Bank Conducts Largest Currency Intervention of 2025

To stabilize the som exchange rate, the National Bank of the Kyrgyz Republic (NBKR) carried out its largest currency intervention of 2025, selling nearly $174 million on the foreign exchange market. According to the NBKR, $65.3 million was sold on the day of the transaction, with an additional $108.6 million sold under deferred payment terms. This marks the bank’s sixth intervention of the year and its most substantial by volume. In previous months, the NBKR intervened with $158.3 million in April, $81.5 million in September, and $38 million in October. The regulator emphasized that the som remains a floating currency and that interventions are undertaken solely to limit excessive volatility and ensure market stability. Throughout 2025, the NBKR has only conducted dollar sales, without any reverse interventions to repurchase foreign currency. This pattern reflects sustained demand for foreign currency and active trade flows within the country. As a result of these actions, the som has remained stable, with the exchange rate holding just above 87 soms per $. Since the beginning of the year, the NBKR’s total foreign currency sales have exceeded $590 million. Over the past five years, the bank has carried out 99 interventions, selling nearly $3 billion on the market.

Finance

Kyrgyzstan Officially Launches Gold-Backed State Stablecoin

Kyrgyzstan has announced the launch of its own state-backed digital currency, USDKG, a gold-backed stablecoin pegged to the US dollar. With this move, Kyrgyzstan becomes one of the first countries globally to introduce a government-backed stablecoin secured by physical gold reserves. According to the Ministry of Finance of the Kyrgyz Republic, the initial issuance of USDKG is valued at $50 million. A source within the ministry told The Times of Central Asia that this launch marks just the beginning of a phased rollout. “In a few weeks, USDKG will be listed on crypto exchanges, making it available for purchase. If the project is successful, we could double the issuance volume within a year and ultimately scale to $1 billion,” the official said. The stablecoin is being issued by Virtual Asset Issuer, a state-owned company under the Ministry of Finance. The ministry noted that the primary use case for USDKG will be cross-border transactions. Users will be able to convert the digital asset into fiat currency from virtually anywhere in the world. Momentum for the project grew after a high-profile visit in October by Binance founder Changpeng Zhao, who met with President Sadyr Japarov in Bishkek. Following the meeting, President Japarov instructed the National Council for the Development of Assets and Blockchain Technologies to create the necessary regulatory framework to support the launch and international listing of the KGST stablecoin. Simultaneously, the National Bank of Kyrgyzstan is developing its own digital currency. Unlike USDKG, this central bank digital currency (CBDC) will be aimed at broad public use and has already been recognized as an official means of payment in the country.

Finance

Kazakhstan Weighs Converting Part of National Fund into Cryptocurrency

Kazakhstan’s monetary authorities are considering the possibility of converting a portion of the country’s National Fund assets and gold and foreign exchange reserves into cryptocurrency. The proposal was announced by Berik Sholpankulov, Deputy Chairman of the National Bank, during a session of the Mazhilis (lower house of parliament). “We are considering the possibility of using part of the National Fund’s assets and gold and foreign exchange reserves for investment in crypto assets,” Sholpankulov stated. He emphasized that any such operations would be conducted solely through a state-managed crypto asset fund, the creation of which is currently under government discussion. “First of all, confiscated crypto assets will be transferred to the state digital asset fund, where they will be stored as a strategic reserve of the government,” Sholpankulov explained. He added that the Ministry of Digital Development has proposed allowing state-owned mining enterprises to supply energy to private mining companies in exchange for payment in cryptocurrency. According to the National Bank, the assets of the National Fund rose by $990 million in September compared to August, reaching $62.7 billion. Gold and foreign exchange reserves increased by $3.1 billion to $57.4 billion. However, foreign exchange assets declined by $1.9 billion to $17.7 billion, while gold reserves grew by more than $5 billion, reaching $39.7 billion. Previously The Times of Central Asia reported that the National Bank had approved a concept for forming a national reserve of crypto assets. The reserve is expected to be managed through a new subsidiary focused on alternative investments. The government is also exploring the establishment of crypto banks and a licensed national cryptocurrency exchange to operate across Kazakhstan. As also previously reported by The Times of Central Asia, authorities have shut down 130 illegal cryptocurrency exchanges suspected of laundering criminal proceeds since the beginning of the year. Virtual assets worth $16.7 million were seized in connection with the crackdown. Sholpankulov previously noted that approximately $15 billion in cryptocurrency has left the country due to gaps in legislation governing digital assets.

Finance

Kyrgyzstan Introduces Voluntary Loan Ban to Curb Financial Fraud

Starting November 1, Kyrgyzstan will implement a self-restriction mechanism allowing citizens to voluntarily block the issuance of loans and credits in their name, a measure aimed at protecting individuals from financial fraud involving unauthorized loans. Announcing the initiative at a press conference on October 30, Bektur Aliyev, Deputy Chairman of the National Bank of Kyrgyzstan, said the new regulation comes in response to a rise in cases where fraudsters used fake or stolen passports to secure loans online. The self-restriction can be activated or revoked remotely at any time via the State Portal of Electronic Services or the Tunduk mobile app. Once submitted, the restriction takes effect immediately, while cancellations require a 12-hour waiting period. Financial institutions, including banks and microfinance organizations, are legally required to check for any active self-restriction before issuing a loan. If such a restriction is in place, the loan cannot be granted. Should a loan be issued during the restricted period, the contract is deemed legally invalid and the lender has no legal grounds to demand repayment. According to the National Statistics Committee, microcredit organizations issued over 40 billion soms in loans to more than 567,000 recipients in the first half of 2025. More than 60% of those loans were for consumer purposes, and the volume of microloans increased by 34% compared to the same period last year. A similar voluntary loan restriction system has been in place in Kazakhstan since 2023.

Global Diplomacy

Billion-Dollar Agreements and a Boeing Deal: Inside Mirziyoyev’s Visit to New York

On September 20, President of Uzbekistan Shavkat Mirziyoyev arrived in New York to participate in events marking the 80th session of the UN General Assembly. At John F. Kennedy Airport, he was welcomed by Paolo Zampolli, Special Envoy of the U.S. President for Global Partnerships, Carolyn Lamm, Chair of the American-Uzbekistan Chamber of Commerce, and other officials. Finance and Critical Minerals Cooperation On September 22, Mirziyoyev held a series of high-level meetings with executives from leading corporations and international institutions. Uzbekistan is seeking to position itself as a reliable supplier in the global critical minerals chain. With reserves of copper, gold, uranium, and rare earths, officials have prioritized foreign partnerships to accelerate exploration and processing capacity, while also ensuring environmental and governance standards are met. In talks with IMF Managing Director Kristalina Georgieva, the two sides discussed expanding cooperation on monetary policy, statistical reform, and educational programs. Georgieva commended Uzbekistan’s economic reforms and reaffirmed the Fund’s support. A $1 billion package of initiatives was finalized with Traxys, the Colorado School of Mines, FLSmidth, McKinsey, and Go Green Partners. These projects focus on critical minerals mining and processing, alongside the creation of a Competence Center in Uzbekistan. Discussions with BlackRock board member Adebayo Ogunlesi centered on establishing a joint infrastructure fund. With Citigroup Chairman John Dugan, the president addressed IPOs of state-owned enterprises, Eurobond issuance, and trade finance mechanisms. Franklin Templeton CEO Jenny Johnson confirmed agreements related to the transformation of state-owned companies and the development of the Tashkent Stock Exchange. President Brian Friedman of the New York-based global investment banking and capital markets firm, Jefferies, meanwhile, expressed interest in helping attract strategic investors to Uzbekistan’s National Investment Fund. Franklin Templeton’s management of Uzbekistan’s $1.7 billion National Investment Fund signals growing trust in U.S. asset managers. Meanwhile, Jefferies’ potential involvement in attracting strategic investors highlights the rising role of global capital markets in Uzbekistan’s privatization and modernization agenda. NASDAQ CEO Adena Friedman discussed the modernization of the Tashkent Stock Exchange and the introduction of a government bond trading platform. Oppenheimer Holdings CEO Robert Lowenthal pledged support for Uzbekistan’s private sector and participation in Eurobond issuance. [caption id="attachment_36462" align="aligncenter" width="1280"] Image: president.uz[/caption] Strategic Agreements Signed A signing ceremony was held in the presence of President Mirziyoyev and U.S. Presidential Special Envoy Sergio Gor. Agreements were exchanged with Boeing, FLSmidth, Cleveland Clinic, Citigroup, Cargill, Pangea Filtration Technology, SLB, Biologic International, and others. During a meeting with WTO Director-General Ngozi Okonjo-Iweala, Mirziyoyev reaffirmed Uzbekistan’s commitment to aligning its legislation with international standards, with the goal of completing WTO accession by 2026. Uzbekistan’s WTO accession is being closely watched in Central Asia, as its success could set a precedent for other countries still outside the organization. For investors, WTO membership would mean greater legal predictability and integration into global trade frameworks. The president also met with Air Products CEO Eduardo Menezes. The company has already invested over $1 billion in Uzbekistan, with projects at the GTL plant, Ferghana Refinery, and “Navoiazot.” Both parties agreed to...

Banking

Dollarization in Kyrgyzstan Declines as Banks Report Lower Profits

The National Bank of the Kyrgyz Republic (NBKR) has reported a continued decline in dollarization within the country’s banking sector, reflecting growing public confidence in the national currency. As of early September, the share of foreign currency loans in the banking sector dropped to 18%, down from over 20% at the start of the year. The decrease is even more pronounced in the deposit base: the share of foreign currency deposits fell from 43% to 38% during the first eight months of 2025. NBKR officials say households are increasingly moving away from the U.S. dollar and other foreign currencies as trust in the national currency, the som, strengthens. Despite the reduction in foreign currency lending and deposits, the sector overall continues to grow. Since the beginning of the year, deposits in Kyrgyz soms have increased by 21%, reaching 717.6 billion KGS ($8.2 billion). The total loan portfolio rose by 26% to 430 billion KGS ($4.9 billion). However, commercial banks are reporting weaker profitability. Financial statements for January to August 2025 indicate a steep drop in earnings from foreign exchange operations. During this period, turnover in foreign currencies fell by more than 2 billion KGS ($23 million), totaling 18 billion KGS ($206.5 million). Analysts note that the current environment contrasts sharply with conditions just a few years ago. After the onset of Russia's war in Ukraine in 2022 and the introduction of Western sanctions, Kyrgyzstan’s currency market experienced significant volatility. Banks then benefited from heightened demand for exchange operations. But with today’s more stable ruble and reduced fluctuations, those profits have diminished. Just five years ago, the National Bank was actively urging citizens to use the som more broadly. At the time, dollar-denominated loans were more expensive, yet remained popular among Kyrgyz borrowers. Now, the trend has reversed, with households increasingly choosing the national currency over foreign alternatives.