ACADEMIC RESEARCH IN MODERN SCIENCE
International scientific-online conference
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METHODS AND INSTRUMENTS OF MONETARY POLICY IN THE
ASPECT OF COMMERCIAL BANKS
Khaliev Gayrat Farkhodovich
Head of Jizzakh JSC "Anorbank" sales office
e-mail: gxaliyev@mail.ru
https://doi.org/10.5281/zenodo.14868547
Abstract:
The article considers the main methods and instruments of
monetary policy of commercial banks of Uzbekistan and the results of their use
in modern conditions.
Keywords
: monetary policy, methods and instruments, financial system,
commercial bank, modern economy.
Central banks and other monetary policy regulators in the XXI century must
solve a large number of different issues related to various aspects of the
country's monetary policy. At the same time, the implemented policy must
balance between competitiveness and economic development and stability. In
this regard, monetary policy regulators must have a whole range of tools and
methods that would allow them to promptly influence the emerging
macroeconomic policy. At the same time, it is important to emphasize that the
tools must be extremely flexible, that is, have varying degrees of influence on the
economy, and also differ in the mechanism of influence [3]. That is, regulators
must have both direct and indirect tools to influence the economy. The need for
such tools is due to economic cycles, as well as the speed of their change. Thus,
in the conditions of a developing economy, the regulator has the opportunity to
implement, for example, a restrictive monetary policy in order to smooth out
economic cycles, and already in periods of economic stagnation and recession, it
conducts a stimulating monetary policy that will allow the real sector to return
to growth. In this regard, monetary policy regulators who have encountered
sharp changes in economic cycles in their activities are of interest. It is necessary
to determine what instruments they used and what goals were pursued when
using this or that instrument and method of monetary policy.
At the same time, there are urgent problems related to the improvement of
monetary policy in our republic. The high growth rate of the money supply and
the depreciation rate of the national currency, the low level of provision of the
country's economy with money, and the relatively high interest rates on loans in
the national currency of commercial banks are among the urgent problems in
this regard.
ACADEMIC RESEARCH IN MODERN SCIENCE
International scientific-online conference
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In turn, finding scientifically based solutions to urgent problems related to
the improvement of monetary policy requires the study of the provisions of
leading monetary and credit concepts and assessing their practical significance.
T. Bobakulov's conclusion that it is necessary to choose the growth rate of
the M2 monetary aggregate as an indicator of the monetary policy of the
republican commercial bank is based on the following evidence:
-The existence of legal grounds for using the growth rate of the money
supply as an indicator of monetary policy;
-The existence of a direct relationship between cash circulation and
economic activity in our republic;
-The ability of the bank to directly influence the money supply in circulation
through the monetary base;
-The leading role of non-monetary factors in the composition of inflation-
forming factors, the fact that the core inflation indicator is not used in the
process of inflation targeting [2].
Within the framework of this article, 8 monetary policy instruments
available to a commercial bank of the Republic of Uzbekistan within the
framework of monetary policy implementation are defined. These instruments
are as follows:
1) Interest rates on operations of the Bank of Uzbekistan;
2) Mandatory reserve requirements;
3) Open market operations;
4) Refinancing of credit institutions
5) Currency interventions;
6) Establishing monetary policy guidelines;
7) Direct quantitative restrictions;
8) Issue of bonds on its own behalf.
It should be noted that such instruments, for example, include specialized
instruments for refinancing credit institutions or mechanisms for providing
foreign currency to credit institutions [1].
As mentioned above, each instrument pursues a specific goal. In this regard,
it is necessary to analyze each instrument in more detail, as well as determine
the degree of its use within the framework of Russian monetary policy at the
current stage of the economic cycle in Uzbekistan.
The last tool that will be considered in this paper is the issue of bonds on
behalf of commercial banks of the Republic of Uzbekistan. Bonds of commercial
banks are a tool for withdrawing excess liquidity from the market of credit
ACADEMIC RESEARCH IN MODERN SCIENCE
International scientific-online conference
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institutions. That is, as in the case of open market operations and refinancing of
credit institutions, this tool is aimed at managing the volume of liquidity in the
market.
In conclusion, it should be said that the combination of monetary policy
instruments used varies from one economic cycle to another, due to the fact that
different goals are pursued in different economic cycles. If the policy is currently
aimed at targeting inflation, then the instruments used will be aimed at
achieving this goal. If commercial banks have another goal, for example,
stimulating economic development through lending mechanisms, then the
monetary policy instruments used by them will be aimed at achieving this goal.
If we evaluate the activities of commercial banks at the present stage, we can say
that despite all the external and internal shocks, the policy of commercial banks
has allowed maintaining relative stability in the banking system of Uzbekistan.
Financial technologies continue to actively develop and are being
implemented by states at all levels of monetary policy implementation.
Innovative approaches demonstrate their benefits and effectiveness.
Commercial banks based on the Central Banks of the world effectively develop
and support the areas of digital services and platforms, cybersecurity and the
cryptocurrency market.
References:
1. Asadov N.N. (2023). Criteria for assessing the effectiveness of the central
bank's monetary policy. News of higher educational institutions. Series:
Economics, finance and production management, (2), 34-40.
2. Kolchugina A.S., Ezangina I.A. Modern instruments of monetary policy of the
state: world practice // Scientific Review. Economic Sciences. - 2022. - No. 4. - P.
122-129.
3. Shulga A. V. (2024). Theoretical aspects of state monetary policy. StudNet, 4
(10).
