Rates for car loans in Uzbekistan’s banks increase

Transport Materials 2 February 2021 12:29 (UTC +04:00)

BAKU, Azerbaijan, Feb. 2

By Klavdiya Romakayeva - Trend:

Car loans in most banks in Uzbekistan have grown to 26 percent and more since January 2021, Trend reports with reference to the Central Bank of Uzbekistan (CBU).

According to the information, the increase in rates may be related to the policy of "acceptable interest rates" on loans, which was introduced by the Central Bank from July 1, 2020 and was in effect until January 1, 2021.

It is noted that the acceptable rates were considered rates on deposits in national currency - 18 percent, on loans in national currency - up to 24 percent, on loans in foreign currency for business entities - up to 8 percent.

The first deputy chairman of the CBU Botir Zakhidov then explained that the regulator decided to stimulate banks to pursue a reasonable interest rate policy by using monetary instruments and prudential measures.

“Increased demand leads to an increase in interest rates on loans and deposits. Today, the average interest rate on loans for business is 24-26 percent, for retail loans for individuals - up to 30 percent. We are very worried that interest rates on loans are growing despite the decline in inflation,” he said.

According to the CBU's statistics, if the average interest rate on loans in soums in June amounted to 23.7 percent, then in July it decreased to 20.6 percent, and by the end of 2020 - to 18.8 percent. The rate on deposits from July to December decreased from 15.7 percent to 14.6 percent.

Earlier the Deputy Chairman of the CBU Behzod Khamraev said that the regulator temporarily took measures to streamline interest rates in connection with the coronavirus pandemic and the crisis, but this practice is no longer valid since 2021.

At the same time, Khamraev stressed that the regulator does not want to interfere with the interest rate policy of banks.

“Interest will streamline the market. Of course, money has its own value, which is determined by the cost of liquidity,” he said.


Follow the author on Twitter: @romakayeva