Tashkent, Uzbekistan, Dec.29
By Demir Azizov - Trend:
The board of the Uzbek Central Bank decided to reduce the refinancing rate from 12 percent to 10 percent as of Jan. 1, 2014, the Central Bank said on Friday.
"Proceeding from the projected indices of the inflation rate for 2014 and to promote rapid economic growth, the Uzbek Central Bank decided to reduce the refinancing rate from 12 percent to 10 percent per annum as of Jan.1, 2014," a statement said.
A floating refinancing rate, correctable depending on the dynamics of the inflation rate, the supply and demand in the money market has been used in Uzbekistan since 2000.
A refinancing rate of 12 percent per annum has been held by the Central Bank of Uzbekistan since January 2011. At that time the refinancing rate was reduced from 14 to 12 percent per annum. The Central Bank's refinancing rate had been 14 percent since July 2006.
A regulator of the country's banking system expects that the reduction of the refinancing rate will reduce interest rates on bank loans, which will enhance investment activity in the real economy.
In particular, the decline in interest rates will occur on loans allocated for the implementation of programs of modernization, technical and technological renewal of production, small business development and micro-lending with a relevant increase in credit investments.
The government plans to keep inflation within 7-9 percent in 2013. According to the data announced at a government meeting, the inflation rate in the reporting period did not exceed the projected parameters. The estimated inflation level will hit 6-7 percent in 2014.
There are 28 commercial banks, including three state banks, four - with foreign capital, 12 - joint stock and nine private in the Uzbek banking system.
The total assets of Uzbek commercial banks increased by 10.4 percent to 39.4 trillion soums, the total loan portfolio - by 11.3 percent to 22.7 trillion soums in January - September compared to 2012.
The total bank capital increased by 3.2 percent - to 6.4 trillion soums as of Oct. 1, 2013.
The official exchange rate is 2.202.15 soums/$1 on Dec. 29.
Translated by NH
Edited by CN