Average interest rates on credits in national currency in Uzbekistan increase
BAKU, Azerbaijan, May 6
By Ilkin Seyfaddini - Trend:
Weighted average interest rates on loans in national currency in Uzbekistan have increased from January through February 2020, up to 25.8 percent and 25.6 percent, respectively, Trend reports citing the Central Bank of Uzbekistan.
The weighted average interest rates on loans in foreign currency continued to decline in January-February 2020, from 7.7 percent in December to 7.5 percent in January and 7.3 percent in February.
High interest rates on loans in the national currency are partly explained by the high cost of long-term resources and increased demand for credits in the period from January through February.
Foreign currency loans are mainly used to finance investment projects, including imports of machinery and equipment.
Thus, the current situation with interest rates (high interest rates on loans in national currency and low interest rates on loans in foreign currency) to some extent is aimed at supporting economic growth, stimulating investments and reducing inflationary pressures.
"In the period from September 2017 to March 2020, the average annual devaluation was 6.8 percent, and it became clear to households that it is more profitable to keep savings in the national currency on bank accounts. In addition, the growth of deposits in national currency will create a resource of long-term liquidity for banks and increase lending opportunities, which, in turn, will lead to lower interest rates on loans," the message said.
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