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METHODS OF ENSURING LIQUIDITY OF COMMERCIAL BANKS IN UZBEKISTAN
Sattorova Nasiba Ganijon kizi
Senior teacher, the Department of “Banking”,
Tashkent State University of Economics
E-
mail:
ABSTRACT:
This article analyzes the methods of ensuring the liquidity of commercial banks in
the Republic of Uzbekistan. It focuses on liquidity risk management strategies, regulatory
approaches, and practical tools implemented in the banking sector. A comparative review with
international practice is also conducted, and effective mechanisms are proposed for Uzbekistan’s
banking system.
Keywords:
commercial bank, liquidity, financial stability, liquidity risk, banking supervision
ANNOTATSIYA:
Ushbu maqolada O‘zbekiston Respublikasida tijorat banklarining likvidligini
ta’minlash usullari tahlil qilinadi. Asosiy e’tibor likvidlik xavfini boshqarish strategiyalariga,
normativ hujjatlar asosidagi yondashuvlarga hamda banklar faoliyatida qo‘llanilayotgan amaliy
vositalarga qaratilgan. Shuningdek, xalqaro tajriba bilan solishtirma tahlil o‘tkazilib, O‘zbekiston
bank tizimi uchun samarali mexanizmlar taklif etilgan.
Kalit so‘zlar:
tijorat banki, likvidlik, moliyaviy barqarorlik, likvidlik xavfi, bank nazorati
АННОТАЦИЯ:
В статье рассматриваются методы обеспечения ликвидности
коммерческих банков в Республике Узбекистан. Особое внимание уделено стратегиям
управления ликвидностью, нормативно-правовой базе и применяемым инструментам.
Проведен сравнительный анализ с международной практикой и предложены эффективные
механизмы для банковской системы Узбекистана.
Ключевые слова:
коммерческий банк, ликвидность, финансовая устойчивость, риск
ликвидности, банковский надзор.
Introduction
Ensuring liquidity remains one of the key priorities for commercial banks, especially amid the
transformation of financial markets, increased lending activity, and the growing influence of
external economic factors. Liquidity determines a bank’s ability to meet its obligations on time,
maintain solvency and stability under stress conditions, and retain the confidence of clients,
investors, and regulators.
In Uzbekistan, where financial sector reforms are actively ongoing, liquidity management is of
particular importance. The Central Bank of the Republic of Uzbekistan is steadily implementing
international supervisory standards, including the requirements of Basel III, which has resulted in
the tightening of liquidity regulations. Since 2024, there has been a significant increase in the
Liquidity Coverage Ratio (LCR) – from 157.1% to 196.5% by May 2025 – as well as in the Net
Stable Funding Ratio (NSFR) – from 111.0% to 116.4%. This indicates qualitative progress in
liquidity management.
However, risks are also intensifying: according to the Central Bank, household debt has reached
34%, which may impact loan repayment rates and, accordingly, the liquidity position of banks.
Moreover, several banks remain highly dependent on short-term funding sources, necessitating
the adoption of more sustainable and flexible liquidity management tools.
In this context, the present study aims to analyze current methods for ensuring the liquidity of
commercial banks in Uzbekistan, assess their alignment with international standards, identify
existing challenges, and formulate scientifically grounded proposals to enhance the effectiveness
of liquidity regulation in the country’s banking system.
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Literature review
The issue of commercial bank liquidity occupies an important place in modern banking theory
and practice. According to classical concepts presented in the works of John Hicks and later
developed in the asset transformation model by Diamond and Dybvig, bank liquidity arises from
the inherent mismatch between short-term liabilities and long-term assets. This fundamental
characteristic necessitates the implementation of flexible and effective liquidity management
methods, which is particularly relevant for developing financial systems such as Uzbekistan’s
banking sector.
Research by the Bank for International Settlements (BIS) emphasizes the role of high-quality
liquid assets and regulatory requirements (in particular, the LCR ratio) as the foundation for the
sustainable functioning of banks. According to the BIS 2023 report, priority is given to the
institutional capacity of banks to maintain an adequate stock of liquid assets to withstand
unexpected outflows.
In the national context, liquidity issues have been analyzed by Uzbek economists such as A. N.
Aripov and I. T. Isomov. Aripov notes that liquidity management in Uzbekistan must take into
account the characteristics of a transitional economy, where the financial market is
underdeveloped and the share of state ownership in the banking sector remains high. Isomov, in
turn, emphasizes the importance of stress testing and active short-term liquidity management,
considering the volatility of the deposit base.
The International Monetary Fund (IMF), in its technical consultations with Uzbekistan (for
example, the IMF mission in 2022), highlights the need to strengthen liquidity risk management
frameworks and to develop money market instruments, including repo and swap operations, as the
basis for short-term liquidity control.
Additionally, the World Bank, in its analytical report on Uzbekistan's financial sector, points to
the importance of improving the liquidity regulatory framework and enhancing the independence
of the regulator to avoid excessive reliance of commercial banks on refinancing from the Central
Bank.
Thus, the analysis of the existing literature demonstrates both the universal principles of liquidity
management and the specific characteristics unique to Uzbekistan’s banking sector. This calls for
the integration of international experience with national conditions and the legal framework.
Research methodology
This study employs methods of comparative analysis and synthesis of regulatory legal acts,
statistical data from the Central Bank of Uzbekistan, and reports from international financial
institutions. For analytical purposes, the study utilizes economic-statistical modeling and expert
evaluation techniques to identify current approaches to ensuring liquidity in commercial banks.
Analysis and results
An analysis of the liquidity of commercial banks in Uzbekistan for the period from May 2024 to
May 2025 demonstrates a positive trend in key indicators, reflecting the strengthening of the
financial stability of the banking sector.
According to the Central Bank of the Republic of Uzbekistan, the volume of high-quality liquid
assets increased from 94,310 billion UZS as of May 1, 2024, to 150,632 billion UZS as of May 1,
2025, representing a growth of 59.7%. The share of high-quality liquid assets in total bank assets
rose from 14.1% to 18.2%, indicating improved capacity of banks to meet their obligations in a
timely manner.
The Liquidity Coverage Ratio (LCR), which reflects the banks’ ability to withstand short-term
funding outflows, increased from 157.1% to 196.5%, significantly exceeding the minimum
regulatory threshold of 100%. This indicates that banks maintain a sufficient stock of liquid assets
to cover obligations under stress conditions.
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The Net Stable Funding Ratio (NSFR), which evaluates the stability of long-term funding, rose
from 111.0% to 116.4%, also exceeding the minimum requirement of 100%. This suggests a
balanced structure of bank assets and liabilities, ensuring long-term financial sustainability.
The instant liquidity ratio, which reflects a bank's ability to immediately meet its short-term
obligations, increased from 95.5% to 125.4%, significantly above the minimum required level of
25%. This indicates a high readiness of banks to satisfy sudden liquidity demands.
A comparative analysis of the liquidity indicators of commercial banks in Uzbekistan is presented
in the table below:
Table 1.
Dynamics of liquidity indicators of commercial banks in Uzbekistan (01.05.2024 –
01.05.2025)
Indicator
01.05.2024
01.05.2025
Change
(%)
High-quality liquid assets (billion UZS)
94 310
150 632
+59,7%
Share of high-quality liquid assets in total
assets (%)
14,1%
18,2%
+4,1 %
Liquidity coverage ratio (LCR) (%)
157,1%
196,5%
+39,4 %
Net stable funding ratio (NSFR) (%)
111,0%
116,4%
+5,4 %
Instant liquidity ratio (%)
95,5%
125,4%
+29,9 %
These data confirm that commercial banks in Uzbekistan have significantly strengthened their
positions in key liquidity indicators over the analyzed period. The increase in the volume of high-
quality liquid assets and the exceeding of regulatory requirements for liquidity ratios indicate
enhanced resilience of the banking system and its capacity to effectively manage liquidity in a
changing economic environment.
However, despite these positive trends, it remains essential to continuously monitor the factors
affecting bank liquidity, including the growth of household lending and the associated risks.
According to the Central Bank, in 2024 the average household debt burden reached 34%, which
could put pressure on banks’ liquidity in the event of declining borrower solvency.
Overall, the analysis results demonstrate the successful application of liquidity management
methods by Uzbekistan’s commercial banks, in line with international standards and national
regulatory requirements. This contributes to strengthening confidence in the banking system and
supporting its sustainable development.
Conclusions and recommendations
The conducted analysis has shown that, between May 1, 2024, and May 1, 2025, commercial
banks in Uzbekistan achieved significant progress in ensuring liquidity. All key indicators
demonstrated growth: the volume of high-quality liquid assets increased by nearly 60%, and both
the LCR and NSFR ratios significantly exceeded the established minimum regulatory thresholds.
These developments indicate an improvement in the financial stability of the banking sector. The
progress is largely the result of the Central Bank’s active policy aimed at implementing
international liquidity management standards, as well as the efforts of the banks themselves to
optimize the structure of their assets and liabilities.
Nevertheless, certain risks persist, particularly related to the growth of consumer lending and a
potential decline in household solvency. Additionally, a number of banks remain highly
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dependent on short-term funding, which underscores the need to further strengthen mechanisms
for long-term financial stability.
In this regard, the following measures are proposed:
1.
Enhance oversight of the balance between the asset and liability structures
of
commercial banks, particularly with regard to maturity and currency composition.
2.
Develop domestic liquidity markets
(such as repo and swap operations), enabling
banks to respond more flexibly to short-term liquidity needs.
3.
Expand the practice of stress testing
by incorporating scenarios involving
macroeconomic shocks, including external economic and inflationary factors.
4.
Improve the regulatory framework for liquidity
, with a focus on applying a
differentiated approach to systemically important and regional banks.
5.
Increase financial literacy among the population and businesses
, which will help
reduce pressure on banks' liquid resources amid fluctuations in demand for credit products.
The implementation of these recommendations will enhance the efficiency of liquidity
management in Uzbekistan's banking system and ensure its resilience to potential internal and
external challenges.
List of references
1.
Diamond, D. W., & Dybvig, P. H. Bank Runs, Deposit Insurance, and Liquidity.
Journal of Political Economy, Vol. 91, No. 3.
2.
Bank for International Settlements. Basel III: The Liquidity Coverage Ratio and
liquidity risk monitoring tools. BIS, 2023.
3.
Центральный банк Республики Узбекистан. Официальные статистические отчёты
по банковскому сектору.
4.
Арипов А. Н. Устойчивость банковского сектора Узбекистана в условиях
трансформационной экономики. Ташкент: Институт экономических исследований.
5.
Исомов И. Т. Инструменты управления ликвидностью в коммерческих банках
Узбекистана. Журнал «Экономика и финансы», № 4.
6.
International Monetary Fund. Republic of Uzbekistan – Technical Assistance
Report: Risk-Based Supervision. IMF, 2022.
7.
World Bank. Uzbekistan Financial Sector Assessment Program (FSAP). Washington,
DC: World Bank Publications.
8.
Spot.uz. Насколько долговая нагрузка населения Узбекистана влияет на
стабильность банковской системы.
https://spot.uz/ru/2025/05/30/loans-stability
9.
Закон Республики Узбекистан № ЗРУ-582 «О внесении изменений и дополнений в
Закон Республики Узбекистан «О Центральном банке Республики Узбекистан». Принят 11
ноября 2019 года.
