CURRENT ISSUES OF MONETARY POLICY

Аннотация

Improving the practice of using monetary policy instruments, in turn, is important in ensuring the stability of the national currency, prices, balance of payments, liquidity of the banking system and economic growth, development of financial markets, especially stock, capital, securities, money and foreign exchange markets, increasing investment efficiency earns. In developed countries such as the United States, Japan and Germany, the central banks have accumulated many years of theoretical, practical and methodological experience in ensuring and strengthening economic growth, macroeconomic and financial stability based on increasing economic and investment activity through the effective use of monetary policy various monetary models are effectively used in its activities. Over the past years, the regulatory and methodological foundations of the banking system have been formed and strengthened in Uzbekistan. Innovative banking services and financial technologies began to be used. Also, the Decree of the President of the Republic of Uzbekistan dated September 13, 2017 No. PP- 3272 “On measures to further improve monetary policy” provides for measures to improve coordination practices in the field of general economic, fiscal and monetary policy, the use of interest-bearing instruments used in monetary policy operations to provide and attract liquidity. urgent tasks are being set to improve monetary policy, such as expansion [1]. The issue of the use of monetary policy instruments has been thoroughly studied by economists in the economic literature and relevant scientific conclusions and practical recommendations have been formed. In particular, M. Friedman concludes that the central bank has sufficient capacity to manage the money supply, and at the same time concludes that inflation is not a 59 ACADEMIC RESEARCH IN MODERN SCIENCE International scientific-online conference multifactorial process [2]. This conclusion is based on the fact that the Central Bank can manage money supply and interest rates using open market operations and discount operations. Indeed, the purchase of securities by the Central Bank on the open market will lead to an increase in the reserves and monetary base of the banking system, an increase in the money supply and a decrease in short-term interest rates. In particular, a group of economists has proposed the introduction of a 100% mandatory reserve requirement for deposits of commercial banks in order to actively use the reserve policy [3]. However, some economists have expressed a negative view of the mandatory reserve policy. For example, according to the well-known foreign economist F. Mishkin, mandatory reserve requirements have many shortcomings, including the possibility of liquidity problems in banks [4]. McCallum, a foreign economist, argues that the demand for money is not stable, so the central bank’s interest rate is the main instrument of monetary policy [5]. Foreign economist According to V. Yurovitsky, in the absence of mandatory reserve requirements, all issued money is an asset, which in turn leads to an increase in deposits of commercial banks [6]. According to one of the foreign economists S. Moiseev, open market operations are now the main tool of monetary policy in developed countries. Open market operations allow central banks to enter into transactions on their own initiative, that is, to be more flexible in determining the timing and volume of monetary operations [7]. Analysis of the structure of the broad money supply shows that since 2017, with the liberalization of monetary policy, the share of deposits in the structure of the broad money supply has increased significantly from 16.8 percent in 2016 to 35.1 percent in 2017 and for 6 years has been more than 30 percent on average. As a result of a significant increase in deposits in the national currency in the structure of the broad money supply to 60.2 percent in 2024, the share of deposits in foreign currency has significantly decreased to 20.5 percent. As of January 1, 2025, the level of cash supply to the Uzbekistan economy was 19.3%, the inflation rate was 9.8%, and the interest rate was 13.5% (Table 1). 60 ACADEMIC RESEARCH IN MODERN SCIENCE International scientific-online conference Table 1 The structure of the Broad money (monetary aggregate M3) in the Republic of Uzbekistan [8] The currency The deposits in The deposits in Years (monetary national foreign currency aggregate M0) currency 2018 26.5 43.2 30.2 2019 25.5 44.6 29.9 2020 22.2 46.9 30.8 2021 19.7 49.0 31.2 2022 22.3 52.6 25.1 2023 21.5 56.0 22.5 2024 19.3 60.2 20.5 It should be noted that indirect monetary policy instruments allow Central banks to increase the effectiveness of monetary policy. This can be seen in ensuring the stability of the national currency and prices, achieving economic growth, macroeconomic and financial stability. A significant growth rate of the money supply and cash is associated with the liberalization of monetary p