Publication Details
Abstract
Given the challenges of global inflationary pressure and Uzbekistan’s liberalized monetary policy, interest rate policy plays a key role in both improving the performance of commercial banks and ensuring national economic stability. A gap in the knowledge to date is that the relationship between the volume of loans issued and the dynamics of interest rates has not yet been quantitatively assessed. Thus, there are no prior investigations of the problem to rely on, and most studies are theoretical and have to do with forecasting, not with the empirical relationship assessment aspect. In this research, I will use monthly data from 2020 to 2024 and apply statistical methods and the ARIMA model to assess the relationships and forecast the results for 2025-2026. Thus, the overall lending volume increased over the considered period, amounting to 4.3 trillion to 32.9 trillion UZS. At the same time, the weighted average on loans decreased from 26% to 23.5%. The results of the forecast show a further increase in the volume of loans issued to over 37 trillion UZS by 2026, while the interest rates will continue to stagnate at the minimum level of 22.2%. The decrease in the rate indicates that the availability of credit will increase, and the investment potential of the national economy will largely depend on the improved macroeconomic situation. This allows the conclusion that financial market stability is possible when competition strengthens, the deposit base expands, and best international practices are applied continuously in fixing the price of credit. Thus, the interest rate policy in Uzbekistan’s commercial banks directly stimulates sustainable economic growth.