A Memorandum of Understanding has been signed between the Central Bank of Uzbekistan and Frontclear Management B.V. aimed at supporting the development of the interbank money market in Uzbekistan.
Within the framework of this cooperation, the parties agreed to promote the development of the country’s money market infrastructure, expand the markets for repurchase agreements (repo) and derivative financial instruments, and further improve the institutional and legal environment necessary for financial market participants.
In accordance with the Memorandum, the main areas of cooperation include:
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development of the interbank money market, the secondary market for government securities, and improvement of the methodological framework for repo operations;
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development of the derivatives market;
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strengthening financial market infrastructure and enhancing the legal framework in line with international standards;
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organization of knowledge-sharing and capacity-building programs for banks and other participants of the financial market.
In addition, in order to improve the legal framework governing repo transactions and derivative financial instruments in Uzbekistan, the current legislation will be reviewed with regard to the practical application of agreements based on the requirements of the International Swaps and Derivatives Association (ISDA) and the Global Master Repurchase Agreement (GMRA), as well as the legal enforceability of netting mechanisms. Based on this review, the necessary proposals and recommendations will be developed.
This cooperation will contribute to improving the functioning of the interbank money market and the broader financial market in Uzbekistan in line with international standards, as well as to strengthening mechanisms for managing foreign exchange risks.
