ACADEMIC RESEARCH IN MODERN SCIENCE
International scientific-online conference
193
MONETARY POLICY OF THE CENTRAL BANK AND ITS IMPACT ON
THE INFLATION RATE
Norkulov Habibullo Ilhon oglu
SamISI teacher
Ahmatova Mukhlisa Ahmat kizi
SamISI student
https://doi.org/10.5281/zenodo.15321649
Abstract.
This article examines the essence of the Central Bank's monetary
policy and the mechanisms of its influence on the inflation rate. The main
attention is paid to the monetary policy decisions adopted in the Republic of
Uzbekistan in recent years and their results. The key rate policy of the Central
Bank, money supply control, currency interventions and inflation forecasts are
analyzed. The analysis reveals important factors in ensuring macroeconomic
stability in the country.
Keywords.
Monetary policy, central bank, inflation, key interest rate,
money supply, liquidity, economic stability.
Абстрактный.
В статье рассматривается сущность денежно-
кредитной политики Центрального банка и механизмы ее влияния на
уровень инфляции. Основное внимание уделено решениям денежно-
кредитной политики, принятым в Республике Узбекистан за последние
годы, и их результатам. Были проанализированы политика центрального
банка в отношении ключевой процентной ставки, контроль за денежной
массой, валютные интервенции и прогнозы инфляции. Анализ выявляет
важные факторы обеспечения макроэкономической стабильности в
стране.
Ключевые слова.
Денежно-кредитная политика, центральный банк,
инфляция, ключевая процентная ставка, денежная масса, ликвидность,
экономическая стабильность.
Introduction.
Monetary policy occupies a central place in the economic development
strategy of each country. Central banks use various tools to maintain price
stability, stimulate economic growth, and ensure the stability of the financial
system. Monetary policy controls the money supply and interest rates.
In the Republic of Uzbekistan, monetary policy in recent years has been
aimed at reducing inflation and strengthening macroeconomic stability. In
particular, the Central Bank actively influences the economy by setting the key
rate, regulating liquidity, and shaping inflation expectations. The article analyzes
the latest decisions and impact of this policy.
ACADEMIC RESEARCH IN MODERN SCIENCE
International scientific-online conference
194
Main part.
The Central Bank of the Republic of Uzbekistan focused on controlling the
inflation rate throughout 2024. Since high inflation rates negatively affected the
real incomes of the population, it became necessary to conduct a tighter
monetary policy. The key interest rate was adjusted depending on inflationary
risks.
In December 2024, the Central Bank maintained the key interest rate at 14
percent. This decision was made to ensure a balance between stimulating
economic growth and curbing inflation. Such a rate had a significant impact on
the volume of lending and overall economic activity.
The Central Bank also took measures to increase the mandatory reserve
requirements for credit institutions. Through these measures, the level of
liquidity in the banking system was brought under control. As a result, excess
money supply is being limited so that it does not cause inflationary pressure in
the economy.
One of the main factors of inflation is the growth of the consumer price
index, which the Central Bank regularly monitors. At the beginning of 2025, the
inflation rate was around 8.6%. According to the Central Bank's forecast,
inflation is expected to decrease to 5–7% by the end of the year.
In recent years, the Central Bank has been gradually introducing an
inflation targeting system. In this system, the Central Bank sets a specific target
for the inflation rate and directs its policy to achieve this target. This approach
serves to increase economic confidence.
Currency policy is also an integral part of monetary policy. In 2024, the
Central Bank continued to form the soum exchange rate based mainly on market
mechanisms. This made it possible to curb inflation by influencing import prices.
The Central Bank is strengthening its information policy and
communicating its decisions to the public in an open and transparent manner.
Monetary policy statements and inflation forecasts are published quarterly. This
is of great importance in shaping the expectations of economic entities.
To increase the effectiveness of monetary policy, coordination with fiscal
policy is necessary. The government of Uzbekistan is helping to reduce
inflationary pressures by strengthening budget discipline and optimizing taxes.
This coordination will keep inflation low in the long term.
The Central Bank has developed a Monetary Policy Strategy for 2025–2027.
This strategy includes controlling inflation, increasing financial stability, and
supporting the real sector. The strategy is being implemented in stages.
ACADEMIC RESEARCH IN MODERN SCIENCE
International scientific-online conference
195
External factors also affect price changes in the Uzbek economy.
Fluctuations in international commodity prices and geopolitical risks affect the
effectiveness of monetary policy. The Central Bank is adjusting its policy taking
these risks into account.
International experience shows that in addition to monetary policy,
structural reforms are also necessary to effectively control inflation. Therefore,
steps are being taken in Uzbekistan to develop competitive market mechanisms
and liberalize the financial system.
In the future, it will be necessary to actively use macroprudential policy
tools to further improve monetary policy. Managing liquidity risks and
strengthening financial stability are identified as priorities.
Conclusion.
The monetary policy implemented by the Central Bank plays an important
role in ensuring the economic stability of Uzbekistan. The prudent setting of key
interest rates, control of the money supply, and the inflation targeting system
are leading to positive changes in the economy.
In the future, the country will have more opportunities to maintain inflation
within acceptable limits by consistently conducting monetary policy,
strengthening financial stability, and ensuring consistency with fiscal policy. The
Central Bank continues its activities in this regard.
References:
1. O‘zbekiston Respublikasi Markaziy banki rasmiy sayti — www.cbu.uz
2. O‘zbekiston Respublikasi Prezidentining 2024-yil 30-dekabrdagi PF-245-son
Farmoni.
3. Markaziy bankning 2025-yil mart oyi pul-kredit siyosati bayonoti.
4. Jahon banki, "O‘zbekiston iqtisodiy ko‘rsatkichlari tahlili", 2024.
5. Xalqaro Valyuta Jamg‘armasi (IMF), "O‘zbekiston iqtisodiy sharhi", 2024.
6. G‘ulomov S.S., Abdullayev Yo.B. "Pul, kredit va banklar". – Toshkent:
Iqtisodiyot, 2020.
