Monetary Policy and the Determinants of Financial Stability in Uzbekistan

Abstract. This study examines the macroeconomic data underlying financial stability in Uzbekistan over 2013–2024. Drawing on the credit-to-GDP ratio as the principal indicator of financial depth, together with inflation, the real interest rate, broad money, and commodity-price movements, it traces how the 2017 liberalisation programme reshaped the financial system. The data show a near-tripling of credit-to-GDP from roughly 10% to 34% between 2013 and 2021, an inflation peak of 17.5% in 2018, and a sharp normalisation of real interest rates from deeply negative to strongly positive territory. Set against the Central Bank of Uzbekistan’s financial-soundness indicators — a declining Financial Stress Index alongside a rise in non-performing and watch loans to 20% of total loans in 2023 — the analysis points to improved system-level resilience accompanied by intensifying micro-level credit risk, and supports balancing monetary prudence with macroprudential measures and structural diversification.