The senators heard the report of the Chairman of the Board of the Central Bank of the Republic of Uzbekistan on the activities of the Central Bank of the Republic of Uzbekistan in 2017.

In the report, the chairman of the board, M.Nurmuratov, noted that the monetary policy was carried out in conditions of maintaining high inflationary pressure and transition to the active phase of structural transformations in the economy, including liberalization of foreign exchange policy and foreign trade activity. In this regard, the main attention was paid to the effective use of monetary policy instruments.

The Central Bank strengthened the requirements for level of capitalization and liquidity of commercial banks and in June 2017 increased the refinancing rate from 9 to 14 percent. However, in order to prevent a liquidity deficit that arose due to high growth rates of lending, in the second half of 2017, mechanisms were introduced to provide commercial banks with refinancing loans.

In pursuance of the Presidential Decree from 2 September 2017 "On Priority Measures for Liberalizing Currency Policy", starting from September 2017, a market mechanism has been introduced for determining the exchange rate of the national currency, and restrictions have been lifted on the sale, purchase and disposal of foreign currency funds for population and business entities.

In 2017, the aggregate capital of commercial banks increased 2.3 times and reached 20.7 trillion soums. The capital adequacy ratio increased to 18.8 percent, which is 1.8 times higher than international norms.

The total volume of attracted deposits of commercial banks increased 1.6 times and amounted to 58.7 trillion soums. The total volume of assets of banks doubled and as of 1 January 2018 reached to 166.6 trillion soums.

As a result of continuing the implementation of active lending policies by banks, the total volume of credit investments in the real sector of the economy increased 2.1 times and reached 110.6 trillion soums. In particular, commercial banks allocated loans in the amount of 16.1 trillion soums to finance investment projects, which is 1.3 times more than in 2016.

In order to provide financial support to small businesses and private entrepreneurs, commercial banks allocated credits in the amount of 19.6 trillion soums, including microcredits - 4 trillion soums. In particular, 2.8 trillion soums of loans were issued to develop women’s entrepreunership, services - 3.6 trillion soums and family entrepreneurship and handicrafts - 490.3 billion soums.

In order to improve the living conditions of the rural population, commercial banks provided 1.8 trillion soums of mortgage loans for construction of housing in rural areas for standard projects.

The measures implemented in the banking system in 2017 served to improve the effectiveness of the monetary policy of the Central Bank, further strengthen the financial stability of the banking system, its role in developing business activities and participation in investment processes, and strengthened the country’s macroeconomic stability.

When discussing the report, the senators made suggestions and recommendations on further improving the activities of the Central Bank of the Republic of Uzbekistan. It is recommended to strengthen measures to ensure compliance with the requirements for capital adequacy, liquidity and stability of commercial banks within the requirements of international principles of banking supervision and other measures.

The need for timely and high-quality performance of tasks to increase the level of access to banking services, to protect the rights of consumers of banking services, to radically improve the quality and culture of servicing the population and business entities, provided for by the Presidential Decree of March 23, 2018 "On additional measures to increase the availability of banking services ". It is necessary to pay special attention to measures to improve the business and investment environment, to achieve the necessary conditions for ensuring price stability by minimizing the impact of monetary factors of monetary policy on inflation.

Based on the results of the discussion, a corresponding resolution of the Senate of the Oliy Majlis of the Republic of Uzbekistan was adopted.